BackChat Season 3 Episode 1: Felix Mutati
This week we are joined by Minister of Science and Technology, Felix Mutati. Tune in as he throws light onto what led him to a life in public service, investment opportunities within the sector as well as work that the ministry is currently doing.
Zambia and Mozambique invest in a joint venture in the energy sector
The Governments of Zambia and Mozambique have agreed to invest in joint ventures in the energy sector.
Speaking during a joint press conference with his Mozambique counterpart FILIPE NYUSI at State House this afternoon, President HAKAINDE HICHILEMA said the Government is ready to work with Mozambique to develop a gas pipeline from that country to Zambia.
He further said the two countries will also explore possibilities of bringing on board the private sector to help fund the gas pipeline project.
And Mozambique President FILIPE NYUSI said Mozambique stands ready to supply fuel to Zambia through the construction of a gas pipeline from Luvuma basin in Northern Mozambique to Zambia.
President NYUSI added that a feasibility study will soon be conducted to explore possibilities of developing the gas pipeline.
He further said Mozambique already has a developed natural gas plant with a Pipeline into South Africa.
This article originally appeared on ZNBC
Zambia Investor Briefing: June 2024
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OVERVIEW
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, is reportedly in talks to buy a stake in Konkola Copper Mines (KCM). According to Chris Griffith, CEO for Base Metals at Metals of KCM’s current owner Vedanta Resources, the company wants to retain majority shareholding in KCM but could sell up to a 30% stake.
Officials from California-based startup KoBold Metals met with President Hichilema to discuss the development of the Mingomba project, formerly known as Konkola West. KoBold aims to produce more than 300,000 metric tonnes of copper annually at the mine, with shaft sinking set to begin in 2026.
Google has entered the Zambian market to revolutionise the Information and Communication Technology (ICT) sector following incentives given by the government. Through its subsidiary Google Cloud, the American technology giant has signed a Memorandum of Understanding (MoU) with the Ministry of Technology and Science which will see the construction of a Center of Excellence in digital transformation, innovation, offering skills development and knowledge sharing.
President Hichilema embarked on a working visit to the UK where he met with King Charles III, government officials, investors and members of the diaspora. During the visit the President received an honorary degree from Heriot Watt University in recognition of his leadership in transforming education in the southern African country.
In welcome news for Zambia’s debt restructuring efforts, international bondholders met early this month to approve the exchange of $3 billion of existing Eurobonds. During his UK trip, President Hichilema met with Alex Garrard of Amia Capital, one of the representatives of the Eurobond holders. There, the President reiterated his commitment to transforming the Zambian economy through investment.
A CLOSER LOOK
Mining Developments
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, is reportedly in talks to buy a stake in Konkola Copper Mines (KCM). Chris Griffith, CEO for Base Metals of KCM’s current owner Vedanta Resources, told Reuters IRH has expressed interest in acquiring the stake and is conducting due diligence on the copper assets. According to Griffith, Vedanta wants to retain majority shareholding in KCM but could sell up to a 30% stake. He said there were other investors seeking the potential to invest in KCM: “We’ve advanced down the road with a number of partners already that are in the process of doing their due diligence”.
Despite reports in March of IRH’s interest in the acquisition of an 80% stake in Lubambe Copper Mine, JCHX Mining, which had previously agreed to purchase the asset, is now reportedly close to concluding a deal on the purchase. According to sources, the Chinese company’s bid to buy the 80% stake from EMR Capital is nearing completion after Abu Dhabi’s IRH gave up its pursuit of the asset. EMR’s CEO Jason Chang told Reuters, “We are happy to state the transaction as announced is on track and we anticipate to be closing in coming weeks”.
Elsewhere, officials from California-based startup KoBold Metals met with President Hichilema to discuss the development of the Mingomba project, formerly known as Konkola West. The company announced its discovery of a vast copper deposit at the site in February, claiming it to be the country’s largest copper deposit in a century. KoBold aims to produce more than 300,000 tons of copper annually at Mingomba, with shaft sinking set to begin in 2026. Bloomberg reported the company could spend $2.3 billion on the project.
Rail and Transport Development Projects
Following collaboration between the Government of Zambia and TradeMark Africa (TMA), the upgrade of the Nakonde border into a one stop border post (OSBP) has officially been handed over to the contractor. The $10.6m UK government-funded project will improve the flow of goods and people along the Dar es Salaam Corridor. It will streamline operations, enhance customs efficiency, and reduce cargo clearance on both sides of the border. According to TMA’s Director of Southern Africa Jovin Mwemezi, “We are happy to be partnering with the governments of the UK and Zambia to implement such a critical trade facilitation project, which has the potential to catalyse regional trade and facilitate intra-regional commerce.”
Elsewhere, work on the Lobito Corridor, a key railway line connecting Zambia and the DRC to the Angolan port, is ramping up. The Lobito Atlantic Railway operator has ordered 275 modern flatbed railcars for transporting containers along the 1,300km long route. Other plans to revitalise the route include upgrading the tracks, locomotives, and freight cars. When complete, the project will greatly contribute to the development of the region’s transport infrastructure and trade connectivity.
Energy Investment
The Government of Zambia has announced an open access policy in the energy sector in a move to revitalise the country’s energy industry following the challenges it has faced during the drought. The policy – which will enable non-discriminatory access to transmission and distribution networks – aims to create a more competitive environment in the sector in a bid to increase investment from private investors and encourage innovation in sustainable energy solutions.
President Hichilema’s Trip to the UK
President Hichilema embarked on a state visit to the UK where he met with government officials, investors, representatives of Eurobond holders, and members of the diaspora. The Zambian president met with King Charles at Buckingham Palace, affirming the deep relations between the two countries. He later journeyed to Scotland to meet First Minister John Swinney, where Hichilema emphasised Zambia’s core foreign policy message of “economic diplomacy to benefit [Zambian] citizens through investment, trade, and partnership”. Bilateral ties between the two nations are strong: Zambia is one of the Scottish government’s four international development partner countries.
His UK trip saw the president receive an honorary Doctorate from Edinburgh’s Heriot-Watt University “in recognition of his leadership in transforming education” in Zambia, including making education free for every person in the country and recruiting nearly 40,000 new teachers. President Hichilema also visited the University of Oxford. There, he attended a Meeting of Eminent Persons at the Blavatnik School of Government, delivered a keynote address, and engaged with young members of the Zambian diaspora.
Foreign Direct Investment
The Young Presidents Organization (YPO) met in Livingstone this month for its annual conference. Among the attendees – which included over 250 global business leaders from 150 countries – was President Hichilema. In his address to the summit the President encouraged YPO members to invest in Zambia, particularly in health, mining, agriculture, tourism and energy, and pointed to the country’s stable investment climate.
In other news, President Hichilema met with the President of the Japan International Cooperation Agency (JICA) Dr Tanaka Akihito at State House. Over the years JICA has played a key role in supporting development projects in Zambia across multiple sectors, including agriculture, healthcare, education, rural development and capacity building. Hichilema said the country aimed to deepen its relationship with JICA and “leverage their technology in areas such as water harvesting, irrigation, and alternative energy”.
Finally, President Hichilema said farewell to outgoing British High Commissioner to Zambia Nicholas Woolley as he concluded his posting. In a statement posted to Facebook, the President described how during Woolley’s tenure the two countries have deepened relations “based on common values such as democracy, the rule of law, liberty, and the fight against corruption”.
LONG READS
Only way is up for G-20 Common Framework after Zambia debt restructuring (The Africa Report, 07.06.24)
How to speed up sovereign debt restructuring (Financial Times, 13.06.24)
Zambia needs copper rethink to achieve sustainable debt, economists say (The Africa Report, 18.06.24)
From Zambia to Nigeria: Cashing in on Africa’s agriculture opportunities (How we made it in Africa, 19.06.24)
Saudi Arabia’s and the UAE’s quest for African critical minerals (The Arab Gulf States Institute in Washington, 20.06.24)
UPCOMING EVENTS
26 June – 2 July - Zambia International Trade Fair, Ndola, Zambia
3-4 July - Mining on Top Africa (MOTA), Paris, France
17-19 July - Africa Impact Summit, Nairobi, Kenya
22-24 July - 2nd UN Tourism Conference on Brand Africa, Livingstone, Zambia
24-26 July - International Conference on Development and Investment in Infrastructure (DII), Livingstone, Zambia
CONTACT US
If you would like to find out more, receive tailored briefings on specific sectors, or send news stories to be included in the next briefing get in touch via info@zambiaisback.com.
Zambia Investor Briefing: May 2024
Do you have a news story you would like included in the next briefing? Email us.
OVERVIEW
Zambia is moving ever closer to emerging from its debt default. Finance Minister Situmbeko Musokotwane announced this week that nearly all of the holders of the $3 billion outstanding international bonds have accepted the restructuring proposal. According to the minister, “Finalising this agreement with bondholders will create the fiscal breathing space necessary for Zambia to remain on a trajectory of sustainable economic growth”.
Abu Dhabi’s International Resources Holding (IRH) is reportedly in talks with the government about the purchase of a stake in Konkola Copper Mines (KCM) from Indian billionaire Anil Agarwal’s Vedanta. According to CEO Syed Basar Shueb, “We are talking to the government because it makes a lot of sense that one party manages Mopani and KCM”.
Turkish company Yeo has entered into a partnership with the Zambian sustainable energy firm GEI Power to invest $65 million in the development of a 60 MWp photovoltaic solar power plant with a 20 MWh battery energy storage in the country.
In an interview with Global Investor’s investment guide to Africa, President Hakainde Hichilema discussed subjects including Zambia’s mining sector, the government’s efforts in the debt restructuring, and green energy initiatives. Also featured in the edition are Zambia’s High Commissioner to the UK Macenje Mazoka, Albert Halwampa and Professor Biemba Maliti of the Zambian Development Agency (ZDA), Finance Minister Situmbeko Musokotwane, and other Zambian government officials and industry leaders.
Minister for Green Economy and the Environment Collins Nzovu spoke to Zambia Is Back’s Choolwe Chibomba about the Government’s response to the ongoing drought, climate change resilience, and the country’s role in the global transition to green energy. The minister also gave an interview with The Guardian where he called for reform of climate financing to help African countries avoid the worse impacts of the climate crisis and stressed that Zambia is “ready for investment”.
Science and Technology Minister Felix Mutati has announced a $54 million investment in Zambia’s information and communications technology sector following a waiver on ICT imports. This was revealed as he welcomed a group from the Common Market for Eastern and Southern Africa (COMESA).
In a boost for the country’s tourism sector, Zambia clinched the title of Best African Leisure Destination at the 2024 Global Traveller Awards.
A CLOSER LOOK
Mining Developments
Syed Basar Shueb, CEO of the UAE’s International Holding Company (IHC), has spoken to the Financial Times about the Zambian ventures of its subsidiary International Resources Holding (IRH). The company broke into the market last year and made headlines with its acquisition of Mopani Copper Mines. Now, Shueb has told the FT that IHC is expected to make about $1 billion of mining acquisitions this coming year. Among them may be Zambia’s Konkola Copper Mines (KCM): IRH is reportedly in talks with the government about the purchase of a stake from Anil Agarwal’s Vedanta. According to Shueb, “We are talking to the government because it makes a lot of sense that one party manages Mopani and KCM”.
Elsewhere, Canada’s Midnight Sun Mining Corp. has announced it is now “sufficiently funded” to carry out explorations in Zambia after closing a $10 million placement. It has previously partnered with the Jeff Bezos-backed startup KoBold Metals to explore the Dumbwa target within the Solwezi copper project. This will allow Midnight Sun “to explore this vast property with the necessary capital and expertise”, according to the company’s marketing and communications director Adrien O’Brien. Drilling is expected to begin in the coming months.
In the US, the White House senior adviser for energy and investment Amos Hochstein has spoken of the importance of countries like Zambia, as well as its neighbouring DRC, in meeting the global demand for clean energy components and power infrastructure, which will be essential to the green energy transition. Hochstein argued the US must encourage mining projects in these countries to ensure “a diversified, sustainable and equitable energy transition”.
Debt Restructuring
Zambia is moving ever closer to emerging from its debt default. Finance Minister Situmbeko Musokotwane announced this week that nearly all of the holders of the $3 billion outstanding international bonds have accepted the restructuring proposal. According to the minister, “Finalising this agreement with bondholders will create the fiscal breathing space necessary for Zambia to remain on a trajectory of sustainable economic growth”.
The International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva had previously said that “The successful implementation of this agreement will provide significant external debt service relief and further contribute to Zambia’s efforts to restore debt sustainability”.
On 7 May a team from the IMF concluded a two-week visit to Lusaka where they were discussing Zambia’s economic policies for its third review of the country’s economic programme, in order to unlock another funding tranche of $180 million. The IMF praised Zambia’s “commendable progress in implementing crucial reforms under the fund-supported program, including significant fiscal efforts in 2023 despite lower mining revenues”.
Despite the punishing effects of the drought on the country’s economy, the Treasury remains optimistic. Its Secretary Felix Nkulukusa recently announced the country’s economic growth is expected to bounce back next year, with GDP expected to expand by about 6% in 2025 and a similar amount in 2026.
The British High Commissioner to Zambia Nicholas Woolley this month praised the progress made to date regarding the debt restructuring in an interview with ZNBC. He also described the country as a “beacon of democracy”, days before the president launched the new National Policy on Anti-Corruption. Hichilema outlined the government’s focus on key areas which will aid the fight against corruption, namely economic expansion, growth, business and entrepreneurship.
Energy Investment
Turkish company Yeo has entered into a partnership with the Zambian sustainable energy firm GEI Power to invest $65 million in the development of a 60 MWp photovoltaic solar power plant with a 20 MWh battery energy storage in the country. The project, which is slated for commercial operation in September 2025, will provide sustainable energy solutions to Zambia’s power deficit. Yeo’s Vice President of Business Development Yasin Duven said the project, which aims to supply at least 65,000 households, “demonstrates [Yeo’s] commitment to sustainable development in Zambia”.
Foreign Direct Investment
Lusaka hosted the China-Zambia High Quality Development Forum this month in an effort to promote cooperation between the two countries. According to Liu Guoyu, economic and commercial counsellor at the Chinese Embassy in Lusaka, 21 cooperation agreements were signed at the forum to a total value of about $1.03 billion. In a keynote speech Hichilema declared the country ready to welcome more Chinese investments that would boost Zambia’s development agenda in sectors such as agriculture, mining, manufacturing and energy.
A Swedish delegation, led by the Minister for International Development Cooperation and Foreign Trade Johan Forrsell, met with Hichilema at State House. The meeting focused on strengthening trade relations and, with Swedish support, improving Zambian resilience in agriculture, green energy, and water harvesting. Sweden has committed over $200 million to its strategy for development cooperation with Zambia over the period 2024-2028.
Elsewhere, State House has marked the 60th anniversary of bilateral relations between Zambia and Japan by hosting Japanese envoy Takeuchi Kazuyuki.
Regional Partners
The beginning of May saw President Hichilema on a state visit to Kenya at the invitation of President William Ruto. There, he addressed the African Union’s (AU) Africa Fertilizer and Soil Health Summit in Nairobi. In his speech he emphasised the need to mobilise capital and invest in the development of agricultural technology, including the need to make fertiliser widely available and affordable across the Continent. On the summit’s sidelines he met with the US Special Envoy for Global Food Security Dr Cary Fowler to discuss the country’s emergency drought situation.
During his trip the Zambian president also addressed issues of regional insecurity, having been invited to speak at the High Level Mediation for South Sudan. Hichilema once again reiterated that “instability anywhere is instability everywhere” and called for a cessation of hostilities in wider Sudan.
LONG READS
Explainer: Does Zambia’s bondholder deal mean it has resolved its default? (Reuters, 01.05.24)
Why African countries are turning their backs on loans from Beijing (The Africa Report, 03.05.24)
Africa’s top companies 2024: South Africa struggles but progress in wider region (African Business, 10.05.24)
Critical Minerals Africa Summit to profile Africa’s investment outlook (African Business, 13.05.24)
Reimagining Zambia’s restructuring in an alternative New York dimension (Financial Times, 16.05.24)
UPCOMING EVENTS
6 June - The Africa Debate, London, UK
7 June - Africa Tech Summit, London, UK
11-12 June - ICA Zambia 2024, Lusaka, Zambia
25-27 June - Africa Hospitality Investment Forum, Windhoek, Namibia
25-28 June - Africa Energy Forum, Barcelona, Spain
26 June - 2 July - Zambia International Trade Fair, Ndola, Zambia
CONTACT US
If you would like to find out more, receive tailored briefings on specific sectors, or send news stories to be included in the next briefing get in touch via info@zambiaisback.com.
Nakonde border to be upgraded into a into a one stop border post
The Government of Zambia have worked with Trade Mark Africa and have officially handed over to the contractor to upgrade the Nakonde border into a one stop border post on 18th June 2024.
The handing-over ceremony was attended by representatives from the Governments of Zambia and the UK, TradeMark Africa, and the contractor. Funded by the UK government, the approximately £8.4 million project will improve the flow of goods and people along the Dar es Salaam Corridor, streamline operations, enhance customs efficiency, and reduce cargo clearance on both sides of the border. The site handover follows the signing of a Partner Support Agreement (PSA) between the Government of Zambia and TradeMark Africa in March this year.
The border post will undergo numerous improvements, including upgrading roads within the OSBP and truck parking yard, constructing additional office buildings and warehouses, and installing a modern x-ray cargo scanner. The project also includes digitising clearance processes and installing smart gates to reduce truck dwell times from 64 hours to less than 10 hours (an 84% reduction). The two and a half days it currently takes to clear cargo trucks leads to significant delays and losses for businesses
The improved trade process that this upgrade will bring, reducing delays and boosting trade operations, will provide potential and existing investors into the country with a great reassurance in the direction that the country is heading in.
BackChat Season 2 Episode 7: Kim Otteby, Umoyo Natural Health
Our conversation this week with Founder and Managing Director of Umoyo Natural Health, Kim Otteby, focuses on the journey of her company since inception, her inspiration behind setting up the business in Zambia and her enthusiasm and passion for health foods. #Zambia #ZambiaisBack #InvestinZambia
Google invests in Zambia
American technology giant Google has entered the Zambian market to revolutionalise the Information and Communication Technology (ICT) sector following incentives given by the government. Google, through it's subsidiary, Google Cloud, has signed a Memorandum of Understanding with the Ministry of Technology and Science which will see the construction of a Center of Excellence in digital transformation, innovation, offering skills development and knowledge sharing.
Government to support investment in pharmaceutical industry
Government says it will support investment in the pharmaceutical industry in order to reduce the cost of importing drugs.
Ministry of Health Assistant Director pharmaceutical Services, MAXWELL KASONDE says the country imports over 90 percent of its pharmaceutical products.
Mr. KASONDE says this is because the country only has six pharmaceutical production companies which are few to meet the demands for pharmaceutical products.
He disclosed that strides have been made in developing a local pharmaceutical strategy that will see more pharmaceutical productions firms in the country.
Mr. KASONDE said this in an interview with ZNBC News when he launched the pharmacy awareness week in Lusaka.
And, Pharmaceutical Society of Zambia, Lusaka Branch Chairperson WAANA SAMULOZELA said unlocking the pharmaceutical industry has the potential to contribute to the economic transformation of the country.
This article originally appeared on ZNBC
Govt approves open access policy on electricity
Government has approved the open access policy on electricity to attract more investment in the energy sector.
President HAKAINDE HICHILEMA says this will see more opportunities for investment in the sector by the private investors and independent power producers.
President HICHILEMA says this will enable the country to enhance more transaction and increase economic activities that have been affected by the drought situation.
He said this when outgoing British High Commissioner to Zambia NICHOLAS WOOLLEY paid a courtesy on him at State House today.
President HICHILEMA thanked the UK government for its continued support to various economic sectors, governance, corruption fight and the attainment of the debt restructuring deal.
And Mr. WOOLLEY reaffirmed the UK Government’s support to Zambia to overcome the various challenges and enhance the relations.
He disclosed that the UK has provided 11.9 million pounds in support of Government’s Social Sash Transfer, emergency nutrition and humanitarian coordination.
This article originally appeared on ZNBC
KoBold Metals to invest US$300m in Mingomba Mine
KoBold Metals says it will invest 300 million U.S dollars to develop Mingomba Mine in Chililabombwe by 2025.
Kobold Metals Africa Chief Executive Officer MFIKEYI MAKAYI says the company is optimistic that it will sink a shaft at the mine by 2026.
Ms MAKAYI says so far 200 million dollars has been invested in developing the Copper Mine which is expected to be the largest in the country.
She says preliminary works have already started and 2-hundred and 71 people have been employed.
Ms. MAKAYI adds that the mine expects to employ about 700 Zambians.
She said this when a KoBold Metals team led by its Co-founders and presidents JOSH GOLDMAN and KURT HOUSE paid a courtesy call on President HAKAINDE HICHILEMA at State House.
And Mr. GOLDMAN said the company is committed to fast tracking the development of the new Copper Mine in Zambia.
Meanwhile Mr. HOUSE said Zambia's policies and business environment make the country an attractive investment destination.
And President HICHILEMA is hopeful that the investments by KoBold metals will translate into bettering people's livelihoods.
He said government will continue to address challenges that may delay the development of the mine or any other project.
President HICHILEMA said the actualization of the investment is because of his continued interactions with investors.
The President also urged the Kobold metals investors to encourage other businesses to invest in the country's energy sector.
Meanwhile Finance and National Planning Minister SITUMBEKO MUSOKOTWANE emphasised that with such investments in the mining sector, the country is poised to attain its ambitious target of producing three million tonnes of copper by 2030.
This article originally appeared on ZNBC
Interview with Hakainde Hichilema President of the Republic of Zambia
Investing in Zambia: Opportunities, Growth, and Sustainable Development Await
Your policies, since assuming office, have undeniably transformed Zambia’s economic trajectory. To what extent has this transformation been aided by global investment, and why?
Our primary goal was to restructure the economy and reignite growth, given its stagnant state prior to our tenure. Central to this endeavour was the imperative of attracting investment. Investment, in all its forms — domestic, regional, and international — stands as a cornerstone of economic development and progress.
We embarked on a multifaceted approach to attract investments, recognising the need to address existing impediments. It was crucial to cultivate an environment conducive to investment, anchored in the rule of law and bolstered by attractive and consistent policies.
For instance, we revamped the mining policy to align with global standards, ensuring competitiveness and stability. This strategic shift yielded remarkable results, with increased in- vestments and commitments pouring into the sector.
Consider the case of First Quantum Mines, which, following policy changes, invested substantially in nickel and copper mining projects, amounting to approximately $1.3 billion. Similarly, Lumina Mines pledged an additional $2 billion investment, reflecting renewed confidence in Zambia’s investment climate.
President Hichilema: “Investment, in all its forms… stands as a cornerstone of economic development and progress.”
Beyond the mining sector, investments have surged in agriculture, tourism, and energy. Small policy adjustments, such as visa fee revisions, have catalysed tourism growth, evidenced by soaring occupancy rates across the country.
In agriculture, we have successfully attracted both domestic and global investors, driving growth and innovation. Likewise, in the mining sector, both brownfield and exploration investments have flourished, promising new opportunities and economic expansion.
In the energy sector, increased investment pledges signal not only support for our domestic needs, but also our ambitions to become a regional energy exporter.
Speaking about the establishment of the Ministry of Green Economy and Environment: were you personally responsible for its creation, and what prompted its formation? Furthermore, what are your expectations regarding its role in attracting foreign investment to bolster Zambia’s economy and enhance the well-being of its citizens?
Indeed, the Ministry of Green Economy represents a novel addition to our government infrastructure, intro- duced during our tenure. Recognising the urgency of addressing climate change and implementing mitigation measures, we took the initiative to consolidate various entities operating in this domain under one umbrella ministry.
This deliberate decision stemmed from the need to streamline efforts and allocate adequate resources and expertise towards combating climate change. Previously, our approach to climate mitigation measures lacked coherence and coordination. Establishing a dedicated ministry with a designated minister and team was essential to focus and intensify our efforts in this critical area.
Moreover, we recognise the intrinsic value of promoting environmentally sustainable practices, especially within industries such as mining and energy. By prioritising green initiatives, including hydro, solar, and wind energy projects, we aim to not only reduce our carbon footprint, but also enhance economic growth.
Furthermore, transitioning from raw mineral extraction to value addition aligns with our vision for sustainable economic development, job creation, and the stimulation of ancillary industries.
“ZAMBIA’S ENGAGEMENT WITH CHINA AND OUR RECENT DEBT RESTRUCTURING AGREEMENT EXEMPLIFY OUR COMMITMENT TO ECONOMIC GROWTH, DEVELOPMENT, AND REGIONAL COOPERATION “
Additionally, the Ministry of Green Economy will play a pivotal role in managing carbon credits in a structured and professional manner, ensuring that revenues generated are reinvested in environmental conservation efforts.
Thank you for shedding light on the recent agreement between Zambia and Chinese businesses, amounting to approximately 3 billion dollars in investment during a recent visit to China. Could you elaborate on the advantages of strengthening ties with China?
Certainly. It's imperative for us, as Zambia, to emphasise that we are open to conducting business with all nations, provided we can find common ground and mutually beneficial arrangements. Engaging with one country does not preclude us from engaging with others — it’s a fundamental principle of our foreign policy. Our foreign policy rests on two pillars: peace, security, and stability, which we advocate for domestically, regionally, and globally, and economic diplomacy, centred on fostering trade and investment. These two pillars complement each other, as stability enables us to focus our resources and efforts on development and investment, thereby addressing the needs of our citizens, including education, healthcare, and support for vulnerable populations.
ZIB’s Choolwe Chimbomba speaks to Minister for Green Economy and the Environment Collins Nzovu for BackChat [watch the full episode here].
Our relationship with China has deep historical roots, predating our independence in 1964. Post-independence, collaborative efforts between Zambian and Chinese leaders, such as the construction of the Tazara Railway, have laid the groundwork for ongoing cooperation. The recent agreement reflects our commitment to revitalising critical infrastructure, including the Tazara Railway corridor, which provides us with vital access to the Indian Ocean — a gateway for trade.
Our engagement with China is guided by four key objectives. First, we seek to mobilise capital to meet our investment needs. However, we emphasise the importance of fair lending terms, as Africa often faces discriminatory lending practices. Second, we aim to leverage Chinese technological advancements to drive innovation and growth across various sectors of our economy. Third, we explore opportunities for joint ventures, particularly in the mining sector, to add value locally and expedite economic development. Finally, we prioritise value addition to our natural resources, promoting sustainable growth and job creation.
Regarding the recent debt restructuring agreement with state creditors, valued at 6 billion dollars, it represents a significant milestone in our economic recovery efforts. By reducing our debt service obligations, we create fiscal space to allocate resources to critical areas such as education, healthcare, and infrastructure. This agreement not only improves our capacity to invest, but also enhances our attractiveness to foreign investors by demonstrating our commitment to fiscal responsibility and sound economic management.
Moreover, our successful debt restructuring sets a precedent for other African countries facing similar challenges. By sharing our experiences and lessons learned, we hope to support fellow nations in navigating their debt burdens and fostering sustainable economic growth. Our collective efforts within the G20 framework underscore the global nature of our challenges and the importance of collaborative solutions.
In conclusion, Zambia’s engagement with China and our recent debt restructuring agreement exemplify our commitment to economic growth, development, and regional cooperation.
This agreement marks a significant milestone in our efforts to address the challenges posed by our debt burden. Initially, when we assumed office, debt stood as a major impediment to our economic progress, stifling growth and development prospects.
“BY PRIORITISING GREEN INITIATIVES, INCLUDING HYDRO, SOLAR, AND WIND ENERGY PROJECTS, WE AIM TO NOT ONLY REDUCE OUR CARBON FOOTPRINT, BUT ALSO ENHANCE ECONOMIC GROWTH”
Through the Zambia Debt Restructuring Project, we have dedicated considerable efforts, resources, and time to renegotiating our debt obligations. This restructuring initiative has yielded substantial results, providing us with much needed fiscal space and flexibility. Over the next decade, instead of facing the daunting task of servicing a 5 billion dollar debt, we will only be required to allocate 750 million dollars —a remarkable reduction that significantly eases our financial obligations.
This newfound financial freedom allows us to redirect resources towards vital sectors such as education, healthcare, infrastructure, and clean water supply. Previously, our ability to invest in these critical areas was severely constrained by our debt burden. However, with the successful debt restructuring, we can now prioritise these sectors and pursue initiatives that promote sustainable development and improve the well- being of our citizens.
Furthermore, the debt restructuring agreement sends a positive signal to foreign investors, enhancing our appeal as a viable investment desti- nation. By demonstrating our com- mitment to fiscal responsibility and sound economic management, we instill confidence in investors, fostering an environment conducive to investment and economic growth.
Our experience with debt restructuring serves as a valuable lesson for other African countries grappling with similar challenges. As a pioneer within the G20 framework, we hope to inspire and guide fellow nations in their debt management endeavours.
This article originally appeared in Global Investor
Zambia to exit sovereign default as bondholders back restructuring
Zambia is closer to ending almost four years in default on its sovereign debt after nearly all holders of the southern African nation’s US dollar bonds voted to approve a long-delayed restructuring plan.
Holders of more than 90 per cent of the nearly $4bn in bonds had already backed the plan by last week ahead of a May 30 deadline, Zambia’s finance ministry said on Tuesday.
The support means Africa’s second-biggest copper producer is on track to implement a restructuring of the debt next month, after its 2020 bond default highlighted growing problems with the international architecture for resolving debt crises in poor countries.
President Hakainde Hichilema’s government finalised a deal on the bonds only in March after overcoming objections by China, Zambia’s largest creditor, that an initial agreement appeared to favour bondholders over other lenders.
“After nearly four years since we initially defaulted on our eurobonds, the close of the restructuring chapter is in sight,” Situmbeko Musokotwane, the finance minister, said.
But while Zambia has also secured relief on over $6bn in debts owed to official lenders dominated by China, the country still has to negotiate terms with more than $3bn of other private debts. These are mostly owed to Chinese commercial lenders.
Zambia has been under pressure to finalise a restructuring in order to continue a $1.3bn IMF bailout, a need that has become more even urgent as a severe drought this year has hit the country’s public finances further.
“Finalising this agreement with bondholders will create the fiscal breathing space necessary for Zambia to remain on a trajectory of sustainable economic growth,” Musokotwane added.
Kristalina Georgieva, managing director of the IMF, issued a call this month for Zambia’s bondholders to support “rapid completion of the debt operation with high participation”.
The bond restructuring will involve cutting the face value of the old bonds by more than a fifth while pushing out maturity dates and payment relief.
Bondholders will receive new debt including a bond that will increase payouts in the years ahead if Zambia can outperform economic targets or the IMF judges that it can carry more debt.
Investors are betting that other lengthy sovereign defaults carried over from recent years are closer to being resolved this year, including Ghana and Sri Lanka.
But the delays have meant many have grown sceptical of a G20-backed process to overhaul debt workouts that was open to poorer countries such as Zambia and Ghana. The Common Framework was meant to improve co-operation between Chinese creditors and western official lenders, but so far has struggled to do so.
“The issue with the Common Framework was that getting everybody into the room meant getting China into the room,” which backfired when China did not participate as planned, one emerging-market debt investor said. “It was well-intentioned, but it was poorly designed.”
This article originally appeared in Financial Times.
Zambia Investor Briefing: April 2024
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OVERVIEW
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, has reportedly made an offer of over $1 billion for a 51% stake in Konkola Copper Mines (KCM). The proposed deal, allegedly worth over $1.1 billion, would see IRH take a majority stake in the Zambian assets of Vedanta Resources, owned by Indian billionaire Anil Agarwal.
The EU-Zambia Business Forum, held in Kitwe this month, brought together policymakers, industry leaders, and other stakeholders in the copper industry to explore opportunities for sustainable growth and green investments in the Zambian copper industry under the theme ‘Growing the Copper Industry through Sustainable Value Chains’.
Canadian energy producer SkyPower Global has signed a power purchase agreement (PPA) with state-owned utility company ZESCO to deliver 1,000 MW of solar energy. This will support the Green Giant Zambia Project. A statement by President Hichilema said the project aims to substantially increase Zambia’s capacity for renewables in order to address “both current and future energy needs”, both for domestic usage and the mining economy.
The Administrator of the US Agency for International Development (USAID) Samantha Power has promoted the Lobito Corridor investment while on a visit to Angola. The rail line will link Zambia and the DRC to the Angolan port of Lobito and bolster trade and economic development in the region by significantly reducing transport time for the country’s mining output, including copper and cobalt, to reach the coast.
A CLOSER LOOK
Mining Developments
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, has reportedly made an offer of over $1 billion for a 51% stake in Konkola Copper Mines (KCM). The proposed deal, allegedly worth over $1.1 billion, would see IRH take a majority stake in the Zambian assets of Vedanta Resources, owned by Indian billionaire Anil Agarwal. A source told Reuters that the company is seeing interest in KCM from various investors.
It has been a busy few weeks for IRH in Zambia. Reuters reported in March that the Abu Dhabi company was interested in acquiring an 80% stake in Lubambe Copper Mine, despite JCHX Mining having agreed in January to purchase the asset. Shortly after, Hichilema announced the IRH had acquired a 51% controlling stake in Mopani Copper Mines ahead of fellow contenders Sibanye Stillwater and China’s Zijin Mining Group.
Elsewhere, with First Quantum Minerals (FQM) allegedly considering the sale of up to a 30% stake in its copper mines in Zambia, reports emerge of companies considering bidding for a stake. Chief among them is mining conglomerate Rio Tinto and Saudi Arabia’s Manara Minerals Investment. The assets, which include Sentinel and Kansanshi copper mines, are also being apparently being assessed by China’s Zijin Mining Group and Japanese companies Mitsui and Sumitomo. It is likely FQM will seek initial bids in the coming weeks.
Debt Restructuring
Following the welcome news at the end of March that Zambia had agreed a revised debt restructuring deal with bondholders, government is now in now in talks to restructure $3.3 billion of commercial debt. Commercial lenders yet to agree to a deal include Chinese state-owned China Development Bank and Industrial and Commercial Bank of China, regional African Export-Import Bank, and western Standard Chartered. Finance Minister Situmbeko Musokotwane has expressed optimism, telling Bloomberg: “We expect the deal to be done in months” having already made “a lot of progress”.
FDI
The EU-Zambia Business Forum, held in Kitwe this month, brought together policymakers, industry leaders, and other stakeholders in the copper industry to explore opportunities for sustainable growth and green investments in the Zambia copper industry under the theme ‘Growing the Copper Industry through Sustainable Value Chains’. Hichilema officiated and addressed the summit. The EU delegation was led by Henrik Hololei, special advisor at the European Commission Directorate for International Partnerships. Hololei has since announced the EU is ready to support Zambia in making its railway network fully operational. The revitalisation of the railways will play a major role in transforming the nation’s economic growth.
Elsewhere, in a significant boost for Zambia’s mining economy, Japan has committed $1.5 billion to support investments in Zambia’s mines by Japanese companies. This was announced during a bilateral meeting in Tokyo between the Minister of Economy, Trade and Industry Paul Kabuswe and Japanese officials at the sidelines of the Zambia-Japan Mining Investment Seminar.
In other news, State House hosted Speaker of the Senate of the Czech Republic Milos Vystrcil, who was leading a delegation from the Czech business community to explore opportunities in Zambia.
Regional Partners
President Hichilema visited Dar es Salaam to celebrate the 60th anniversary of Tanzania’s Union Day. There he held bilateral talks with the country’s president Samia Suluhu Hassan and met with Dr Akinwumi Adesina, President of the African Development Bank to discuss issues of regional integration.
Hichilema also attended the 12th African Land Forces summit in Livingstone, with the theme was ‘Regional Solutions to Transnational Problems’. The president addressed the gathering of leaders and military personnel as the Chair of the Organ on Politics, Defence and Security of SADC, where he stressed the importance of peace and security to economic growth on the continent.
OTHER NEWS
Zambia: Investment flows to return following $3bn restructure, says finance minister (The Africa Report)
How Gulf states are putting their money into mining (Financial Times, 01.04.24)
Zambia: The journey of building a retail chain for farmers (How We Made It In Africa, 03.04.24)
UPCOMING EVENTS
06-09.05.24 - US-Africa Business Summit, Dallas, Texas
07-11.05.24 - Africa Sustainable Trade Week Expo, London, UK
16-17.05.24 - Africa CEO Forum, Kigali, Rwanda
27-31.05.24 - African Development Bank Group’s Annual Meetings, Nairobi, Kenya
28.05.24 - Zambia-Netherlands Business Forum, The Hague, Netherlands
BackChat Interview: Collins Nzovu, Minister for Green Economy and the Environment
Minister for Green Economy and the Environment Collins Nzovu talks to ZIB’s Choolwe Chibomba about the Government’s response to the ongoing drought, climate change resilience, and Zambia’s role in the global transition to green energy.
Japan Pledges $1.5 Billion for Zambia’s Mines
Japan has pledged $1.5 billion to support investments by Japanese companies in Zambia’s mining industry. This announcement signals a significant boost for Zambia’s mineral wealth development and a potential win-win for both nations.
The commitment was made during a bilateral meeting in Tokyo between Zambia’s Minister of Mines and Minerals Development, Paul Kabuswe, and Japanese officials. Japan’s Minister of Economy, Trade and Industry, Saito Ken, confirmed the eagerness of Japanese businesses to invest in Zambia’s mines.
Japan is not just throwing money at the problem. Taku Ishii, Japan’s METI Vice Minister, emphasized a desire for a long-term, mutually beneficial partnership. He highlighted Japan’s interest in “value addition and jobs for the young generation” in Zambia. This suggests Japanese investment could go beyond simple extraction, potentially including smelting, processing facilities, and skills training for Zambians.
Ishii also pointed to ongoing cooperation between the Japan Organisation for Metals and Energy Security (JOGMEC) and Zambia’s Ministry of Mines in mineral exploration. This includes past training programs for Zambian officials and a commitment to further technical collaboration.
Zambia is keen to leverage this partnership. Minister Kabuswe proposed joint ventures and investments in areas like geological mapping, a crucial step in identifying new mineral resources. He also emphasized the need for capacity building in Zambia’s geological survey department to equip them with the latest technologies for exploration.
Kabuswe expressed his appreciation for Japan’s longstanding relationship with Zambia, with both countries celebrating 60 years of bilateral relations this year. This new pledge of financial and technical support seems poised to further strengthen this partnership.
This article originally appeared on Diplomatic Watch
Zambia Investor Briefing: March 2024
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OVERVIEW
In a major development that brings Zambia significantly closer to the completion of its debt restructuring, the government has agreed a revised restructuring deal with bondholders for nearly $4 billion. The Zambian government has said it had “received confirmation that the agreed terms are compatible” with the view of official creditors. This leaves only debts to private corporations still in need of restructuring.
International Resource Holdings (IHR), a unit of Abu Dhabi’s International Holding Company (IHC), is reportedly interested in acquiring an 80% stake in Lubambe Copper Mine, despite China’s JCHX Mining having agreed in January to purchase the asset. This comes days after Hichilema announced the UAE firm had acquired a 51% controlling stake in Mopani Copper Mines, ahead of Sibanye Stillwater and China’s Zijin Mining Group.
According to First Quantum Minerals (FQM)’s Chairman Robert Harding, multiple parties have expressed interest in acquiring a minority stake in the mining conglomerate’s Zambian operations.
Fund manager XSML Capital will expand into Zambia this year, its managing partner Barthout van Slingelandt told The Africa Report. Currently based in Angola, the DRC and Uganda, XSML focuses on SMEs – particularly in consumer-facing industries such as retail, call centres and hospitals. The fund is expected to invest in 40 to 50 companies across the four countries with an average ticket size of $2.5 million.
The Zambian government has signed a partner support agreement worth $8.2 million with TradeMark Africa (TMA) to upgrade the Nakonde One Stop Border Post, a key Zambia-Tanzania trade route. The investment is set to streamline operations along the corridor. Speaking at the singing of the agreement, TMA CEO David Beer said the deal marks the beginning of several transformative projects that have been lined up for Zambia.
A CLOSER LOOK
Debt Restructuring
Zambia has agreed a revised debt restructuring deal with bondholders of nearly $4 billion. This deal with private creditors was the final hurdle for the country's debt restructuring, as the president had announced in February that China and India – the last two countries that had been yet to sign as official creditors – had signed agreements to restructure their holdings of Zambian debt.
The Zambian government has said it had “received confirmation that the agreed terms are compatible” with the view of official creditors. The terms include “foregoing around $840 million in claims and offering approximately $2.5 billion in cash flow relief through reduced debt servicing payments during the IMF Programme period”. According to Hichilema: “Now that this is done, our economic recovery is back on track”.
This comes days after Hichilema told the Financial Times that the delay of Zambia’s creditors to end the stand-off over its $13 billion debt restructuring was “an indictment” of the credibility of the global system, as he urged the country’s creditors to “walk the extra mile and close this transaction”.
Mining Developments
International Resource Holdings (IHR), a unit of Abu Dhabi’s International Holding Company (IHC), is reportedly interested in acquiring an 80% stake in Lubambe Copper Mine, despite China’s JCHX Mining having agreed in January to purchase the asset. Lubambe, which is currently owned by the private equity manager EMR Capital, has the potential to be one of the country’s largest copper mines. The Zambian government through ZCCM Investment Holdings owns a 20% stake, and has yet to approve the facility’s sale.
This followed shortly after Hichilema’s announcement that the UAE firm had acquired a 51% controlling stake in Mopani Copper Mines, ahead of Sibanye Stillwater and China’s Zijin Mining Group. According to ZCCM-IH the deal will see $620 million provided in the form of new equity capital, while around $400 million will be provided as a shareholder loan. The Zambian government retains a 49% stake. The president described the deal as a “significant milestone, being the first substantial investment from the UAE in Zambia”.
In other mining developments, First Quantum Minerals (FQM)’s Chairman Robert Harding told Bloomberg multiple parties have expressed interest in acquiring a minority stake in the mining conglomerate’s Zambian operations. According to Harding, the company is looking for a partner that could “perhaps take interest in working with us on a future project”. FQM’s Zambian assets include the Sentinel and Kansanshi copper mines, as well as a nickel mine. Last year the country accounted for around half the company’s copper output and revenue, delivering more than $450 million in profit.
Elsewhere, Jubilee Metals is looking to “significantly step-up” its copper output in Zambia, according to CEO Leon Coetzer. To reflect the company’s planned expansion it has unveiled two separate boards for its Zambian and South African operations.
Foreign Direct Investment
The UK has pledged £6 million to protect Zambia’s forests and cut emissions in the country. Part of the funding will “support the rollout of climate-smart agriculture practices among smallholder farmers”, which will help to strengthen food security. Training is set to be provided to over 100,000 farmers .
This month, Hichilema hosted the Ambassador of Finland Saana Halinen to State House, as well as a delegation of the Finance Committee of the Parliament of Finland. The parties called for increasing cooperation between the two nations, particularly in mining where Finland has a great deal of experience in geological surveying.
The Zambian president also welcomed to State House a delegation from Saudi Arabia, led by its Minister of Environment, Water, and Agriculture Abdurahman Abdulmohsen A. Alfadley. They discussed avenues for future cooperation and investment, particularly technology and mining.
OTHER NEWS
KoBold Metals discovery accelerates global race for critical minerals (The Africa Report, 06.03.24)
Three presidents on how to make global finance work better for Africa (The Economist, 06.03.24)
Bill Gates-backed startup confident it can unearth more buried treasure after a historic copper find (CNBC, 06.03.24)
Blue economies could transform Zambia from landlocked to ‘land-linked’ nation (Daily Maverick, 13.03.24)
European Investment Bank sees green opportunities in Africa (Bloomberg, 13.03.24)
UPCOMING EVENTS
EU-Zambia Copper Business Forum: Growing the Copper Industry in Zambia through Green Value Chains - Kitwe, Zambia, 10-12.04.24
World Travel Market Africa - Cape Town, SA, 10-12.04.24
Invest in Africa Summit 2024 - Wassenaar, Netherlands, 16-17.04.24
20th Annual AVCA Conference & VC Summit - Johannesburg, SA, 22-26.04.24
Sustainable Horizons: Investing in the Renewable Power of Africa (Invest Africa) - Johannesburg, SA, 23.04.24
AfBC Africa Investment Forum 2024 - London, UK, 25.04.24
AIX: Energy in Transition 2024 - London, UK, 25-26.04.24
Select Zambia Investment Forum 2024 - Lusaka, Zambia, 26.04.24
EU-Zambia Copper Business Forum promotes green investments
THE European Union (EU) is hosting a business forum in Kitwe, to bring together European and Zambian businesses in the copper industry.
This event aims to promote sustainable practices and green investments in Zambia’s copper sector.
According to a statement by the European Union – Zambia Business Forum and GRZ Liaison Chisanga Mwanza the event will take place from April 10 to 12, bring together business representatives from Zambia, European and foreign companies active in the copper industry.
President Hichilema opening the Zambia-EU Business Forum.
Key stakeholders including industry experts, policymakers, and entrepreneurs will discuss opportunities for innovation and growth in the copper value chain.
The forum will also showcase investment opportunities for adding value to Zambian copper.
President Hakainde Hichilema is expected to attend the event together with other government representatives, the EU, along with over 100 companies and 200 participants.
The Delegation of the European Union will be led by Mr Henrik Hololei, special adviser at the European Commission Directorate for International Partnerships.
With global copper demands projected to nearly double by 2035, and the green transition as a major objective for Europe and Zambia, the Forum comes at an opportune time to develop ideas and ways of maximizing copper production and value addition to support the private sector in economic diversification and transition to green and circular economy.
Source: Kalemba
$8m Nakonde Border Deal Signed
By Ruth Chayinda
Government has signed a partner support agreement worth 8.2 Million United States dollars grant with Trade Mark Africa for the upgrading of the Nakonde border post.
Trade mark Africa is funded by the United Kingdom.
Speaking during the signing of the agreement and the project Charter, Trade Mark Africa Chief Executive Officer, DAVID BEER said the deal marks the beginning of several transformative projects that have been lined up for Zambia.
Mr. BEER said this will include digital trade and transportation corridors and climate proofing trade.
And Finance and National Planning Minister SITUMBEKO MUSOKOTWANE said the project will signal a move towards a smarter, more efficient trade mechanism that will catalyse growth, create jobs and reduce the cost of doing business.
Dr. MUSOKOTWANE said the project will help decongest traffic, enhance trade facilitation beyond Tanzania and Zambia and other countries.
He also disclosed that President HAKAINDE HICHILEMA will soon be meeting his Botswana counterpart to assess progress made to decongest Kazungula border post.
Meanwhile, the United Kingdom has announced that it will mobilise an additional two Million United States dollars for the necessary construction costs.
British High Commissioner to Zambia NICHOLAS WOOLLEY said this is aside the support already rendered to the preparatory works.
Mr. WOOLLEY said the project is a demonstration of his government’s support to Zambia and towards achieving regional economic integration and boosting trade.
AND World Bank Country Manager, ACHIM FOCK said the Nakonde One stop border post is part of the border transport corridors for economic resilience project.
Mr. FOCK said the bank is also carrying out some works on the project as the Nakonde One Stop border post is a strategic route for Zambia, to promote sustainable transport which is focused on strengthening regional connectivity and building sector institutions.
He said the bank will finance the development of key infrastructure, the supply of ICT equipment and training of staff at Nakonde.
This article originally appeared on ZNBC
Zambia Investor Briefing: February 2024
OVERVIEW
President Hakainde Hichilema addressed the opening session of Cape Town’s Investing in African Mining Indaba earlier this month. His speech emphasised Zambia’s message of “Invest with Confidence” and highlighted recent investments in the country totalling over $4 billion in the past two years. Hichilema also outlined his government’s work with local and international partners in boosting Zambia’s energy and transport infrastructure as he called for investment partnerships to “power this new, green African future”.
KoBold Metals, a mining consortium backed by tech giants Bill Gates and Jeff Bezos, has announced its discovery of a vast copper deposit in Zambia. The California-based startup claims its Mingomba site, in the northern Copperbelt province, is the country’s largest copper deposit in a century.
President Hakainde Hichilema, together with Senior Advisor to President Biden Amos Hochstein and President of the Africa Finance Corporation (AFC) Samaila Zubairu, convened an investment forum for the Lobito Corridor project in Zambia. The Partnership for Global Infrastructure and Investment (PGI) Lobito Corridor Private Sector Investor Forum in Lusaka brought together over 250 government and industry leaders from Zambia, Angola, the DRC, the EU and the US, as well as international investors.
The Zambian Kwacha is Africa’s best-performing currency in 2024 when compared to the US dollar. The currency is on its longest winning streak in a year, largely because of President Hakainde Hichilema’s government’s decision to increase interest rates and mandate that the central bank retain money in the reserve.
German company 7YRDS Group is set to invest $100 million in two solar projects in Kafue and Sesheke, with a total expected output of 100MW. Operations will commence in 2025 and are expected to create around 1,000 jobs. President Hichilema praised the investment and emphasised his government’s commitment to collaboration with international partners to strengthen Zambia’s energy sector.
In a positive development in the ongoing efforts to restructure Zambia’s debt, Hichilema has announced that China and India – the last two countries that had been yet to sign as official creditors – have signed agreements to restructure their holdings of Zambian debt. Attention now turns to private creditors. Finance Minister Situmbuko Musokotwane had recently expressed optimism that the restructuring would be completed in the first half of this year.
A CLOSER LOOK
Investing in African Mining Indaba 2024
President Hakainde Hichilema addressed the opening session of Cape Town’s Investing in African Mining Indaba earlier this month. His speech emphasised Zambia’s message of “Invest with Confidence” and highlighted recent investments in the country totalling over $4 billion in the past two years. Hichilema also outlined his government’s work with local and international partners in boosting Zambia’s energy and transport infrastructure as he called for investment partnerships to “power this new, green African future”.
First Quantum Minerals (FQM) pledged its support for the president’s vision for the future of Zambian mining in a talk given by the company’s Lead of Infrastructure Development, Jed Goldstein, in which he stressed FQM’s “commitment to Zambia”. The government’s efforts also garnered praise from Anglo American CEO Duncan Wanblad, who said Zambia “is doing a really good job of making mining investable in that country”.
Mining Developments
KoBold Metals, a mining consortium backed by tech giants Bill Gates and Jeff Bezos, has announced its discovery of a vast copper deposit in Zambia. The California-based startup claims its Mingomba site, in the northern Copperbelt province, is the country’s largest copper deposit in a century. KoBold’s founder and president Josh Goldman told the Financial Times: “We now know that Mingomba will be one of the very highest grade large copper mines when put into production”, comparing it to the Kamoa-Kakula mine in the DRC in scale and grade.
The startup deploys artificial intelligence in its exploration for minerals, including copper, cobalt, nickel and lithium. KoBold’s plans to build a $2 billion mine at Mingomba are set to be fast-tracked in the rush to meet demand for critical metals as part of the green energy transition. Goldman told Reuters the company is “receptive to conversations about all kinds of different partnerships” in this regard. If successful, the project will be instrumental in meeting Hichilema’s aim to treble Zambia’s copper output to 3 million tonnes by 2032.
KoBold is also set to expand its presence in Zambia after signing a deal with Midnight Sun Mining to explore its Dumbwa Target in Solwezi.
In other mining news, Anglo American is in the early stages of exploring for copper and cobalt in the North-Western Province, with its CEO Duncan Wanblad announcing that Zambia’s mining sector is “on track for renewed activity”.
Rail Development Projects
President Hakainde Hichilema, together with Senior Advisor to President Biden Amos Hochstein and President of the Africa Finance Corporation (AFC) Samaila Zubairu, convened an investment forum for the Lobito Corridor project in Zambia. The Partnership for Global Infrastructure and Investment (PGI) Lobito Corridor Private Sector Investor Forum in Lusaka brought together over 250 government and industry leaders from Zambia, Angola, the DRC, the EU and the US, as well as international investors, in order to “unlock the enormous potential of this region”. Various commitments were announced during the PGI Forum, including a $250 million investment to support the project from the US International Development Finance Corporation.
Speaking at the forum, President Hichilema described the Lobito Corridor as a “once in a lifetime” opportunity for Zambia’s development. It will significantly reduce transport time for the country’s mining output, including copper and cobalt, to reach the coast. The rail line has its first user lined up after Canada’s Ivanhoe Mines signed a deal with commodities trader Trafigura Group to transport copper on the line from the DRC to Lobito.
Also this month, China announced plans for a $1 billion project restoring a rail line connecting Zambia’s copperbelt region with the Tanzanian port of Dar es Salaam. This follows reports from November 2023 that the Chinese government had asked China Railway Construction Corp., a state-owned company, to negotiate a concession to revive and operate the Tazara railway. The line has fallen into disrepair in past decades but originally had a capacity of about five million tonnes per year. Hichilema has said Zambia is on track to conclude the deal by September.
OTHER NEWS
How five southern African countries worked to put KAZA on the map (Forbes, 07.02.24)
Canadian government hails Zambia as attractive mining investment destination (Lusaka Times, 13.02.24)
Zambia’s Proflight adds Cape Town to its list (eNCA, 22.02.24)
US bets on $2.3 billion African railway to help deliver EV revolution (Bloomberg, 21.02.24)
Modern mining: A sustainability balancing act (African Business, 26.02.24)
UPCOMING EVENTS
Bonds, Loans & ESG Capital Markets Africa 2024 - Cape Town, SA, 05-06.03.24
Global Trade Review Africa 2024 - Cape Town, SA, 07-08.03.24
Global Impact Summit: Sustainable Media and Publishing for Sustainable Economic Development - Livingstone, Zambia 07-09.03.24
Fintech Spotlight: Moving Africa’s Money (Invest Africa) London, UK - 21.03.24
Halfway through HH’s presidency, Zambia’s future looks brighter than ever
Having passed the halfway point of his first term, President Hakainde Hichilema has already delivered a great deal of positive change for Zambia.
His leadership has brought tangible progress in empowering local communities - most notably through his Education for All scheme and the successful expansion of the Constituency Development Fund (CDF) – as well as making great strides in strengthening the economy by increasing investor confidence and working towards a debt restructuring agreement. His achievements mark a pivotal moment for Zambia, where democracy, economic growth, and social progress intersect to create a bright future.
To mark this important milestone in HH’s presidency, Zambia Is Back counts down the president’s most impactful policies and reforms.
1. Delivering free education
Hichilema's pivotal achievement of free education to all citizens of schooling age has ushered in a transformative era for Zambia. Since 10 January 2022, when the UPND’s free education programme began, nearly 2.3 million children have had their access to education restored.
Hichilema’s unwavering commitment to education was reflected in the inaugural national budget, where a 10.4% allocation - the largest in five years - was earmarked for the sector. In 2023 the allocation rose to 13.9% in order to fortify the education system's foundation.
The government's initiatives extend beyond budget allocations. Grants for primary and secondary schools have doubled, accompanied by the recruitment of 30,000 teachers and plans for the construction of over 100 new secondary schools. This surge in educational infrastructure not only creates immediate employment opportunities but also promises an educated and well-balanced future workforce.
Hichilema's vision includes further reducing teacher-to-student ratios in the coming years, so that every child will get the academic attention they need. The administration is well on its way to providing a desk for each child. This feat has been made possible through the substantial expansion of the Constituency Development Fund (CDF), enabling educational equity across the provinces.
With so many children now able to access a full education, Hichilema's presidency signifies a watershed moment in Zambia's educational landscape. Access to quality education is no longer a privilege but a fundamental right for all citizens, and the groundwork is laid for a more prosperous and equal society.
2. Boosting private sector investment
Hichilema is steering economic recovery by restoring the confidence of business and industry in Zambia and thereby encouraging investment in the country. In the period since he took office, international investment has risen from $3.31 billion to at least $37 billion.
A key area of investor confidence is mining: with a goal to treble the country’s copper output by three million tonnes per year by 2032, Hichilema is working to cement Zambia’s position as a major player in the global mining industry. The country has some of the highest-grade copper in the world, and the metal is key to the green energy transition.
Earlier this month, US-based mineral exploration company KoBold Metals found the largest copper deposit the country has seen in a century at its Mingomba site and intends to expedite its $2 billion investment. Hichilema has also struck a deal with Canadian-based First Quantum Minerals (FQM) in the form of a $1.25 billion investment in the expansion of its Kansanshi mine, and a further $100 million to complete the Enterprise nickel mine, which will be one of the largest nickel mines in the world. Meanwhile, Barrick Gold has fast-tracked its $2 billion expansion of Lumwana copper mine.
Investments are creating thousands of jobs for Zambians: since August 2021 over 20,000 jobs have been actualised and a further 112,000 have been committed. The expansion of Kansanshi mine alone will create another 1,800 jobs this year.
Hichilema has also been successful in encouraging foreign investment in the renewable energy sector, commitments to which have increased eightfold from $2 billion in 2021 to $16.1 billion in 2023. This is succeeding in propelling Zambia to the forefront of the green energy transition. Recent developments in this area include the partnership Hichilema agreed with the British government covering clean energy and critical mineral supply worth more than $3.7 billion. Green investment is also enabling the diversification of Zambia’s own energy sources, such as the recently announced project by German-owned 7YRDS to build two large solar projects.
The president’s unwavering dedication to Zambia's economic revival is evident through his strategic approach to foreign investment. Under his leadership, the private sector is experiencing unprecedented growth, fuelling job creation and working towards economic prosperity.
3. Empowering communities through CDF
President Hichilema’s administration has taken a groundbreaking step towards regional development and community empowerment through the significant expansion of the Constituency Development Fund (CDF) in the 2022 budget. Allocated funds have increased from just K1.6 million in former President Edgar Lungu’s budget to a substantial K25.7 million in Hichilema’s first budget and a further K28.3 million in his second.
This large increase gives greater power to communities to foster grassroots change. The new approach grants autonomy to each constituency, allowing it to directly address its most pressing needs in areas such as healthcare, education, vocational training, infrastructure, waste management, and agriculture. It is through investment in local communities that Zambians will gain skills and support to explore their careers and contribute to the economy.
The CDF is delivering lifechanging infrastructure development, such as at Chipata level-one hospital in Lusaka, where CDF funding has increased staff levels and provided up-to-date equipment, improving the quality of medical care for citizens.
This bottom-up approach to development promises to actively address issues of corruption and lack of investment in rural Zambia, fostering a more inclusive and prosperous nation. In essence, the expanded CDF signifies a shift towards people-powered progress, putting the tools for economic advancement directly in the hands of those who need it most.
4. Strengthening democracy and tackling corruption
During his tenure so far, Hichilema has strengthened Zambian democracy by encouraging freedom of expression, legislating for government transparency, and clamping down on corruption.
Hichilema has achieved a significant breakthrough for media freedom in Zambia by enacting the long-awaited Access to Information (ATI) Act after years of unfulfilled promises from previous administrations. The act enables citizens to request information from public bodies, ensuring that government processes are open and accessible to all - including those who are unable to read.
This achievement stands as a stark departure from the oppressive environment cultivated under the previous administration of President Lungu. The closure of The Post, a vital independent newspaper, served as a glaring example of the suppression tactics employed by his government. However, in 2022, a court deemed the closure illegal, and Hichilema's administration went further by repealing the law criminalising defamation of the president. Removing this act from the statute books, alongside scrapping the death penalty and plans to reform the Public Order Act, signifies a new era for freedom of expression and assembly in Zambia.
Hichilema’s dedication to transparency extends beyond the realm of media freedom. He has bolstered institutions such as the Financial Intelligence Unit (FIU) and Anti-Corruption Commission (ACC), underscoring his determination to combat corruption and uphold principles of fair governance.
Recently, Hichilema has overseen the sentencing of the former Deputy Inspector General, Charity Katanga, to three years in prison for purchasing property with illegal funds. In a country where state capture has been the modus operandi of previous presidents, Hichilema’s government is showing that corruption has no place in modern Zambia.
The UPND government represents a turning point in Zambia's trajectory, where the fundamental rights of citizens are safeguarded, and government accountability is prioritised. Through legislative reforms, the president has demonstrated his unwavering belief in the principles of democracy and freedom of expression for all, irrespective of political affiliations.
5. Restructuring historic debts
Since taking office, President Hichilema has been working tirelessly to complete the mammoth task of restructuring Zambia’s $13 billion external debt: a weighty burden he had inherited from his predecessor. In a very positive recent development, Hichilema announced on 26 February that China and India – the last two countries that had been yet to sign as official creditors – have signed agreements to restructure their holdings of the debt.
This is very welcome news and follows several months of protected wrangling between official and private creditors. In 2022, Hichilema managed to secure a provisional deal with official creditors for $6.3 billion and a separate deal with private bondholders for $3 billion, both incredible feats of negotiation which would greatly ease the country’s financial burdens. However, progress has slowed down after official creditors complained that their terms were not as favourable as those received by private lenders.
Nevertheless, things are moving in the right direction. Finance Minister Situmbeko Musokotwane expressed optimism in February that the restructuring would be completed in the first half of this year.
Hichilema is walking through uncharted territory, fixing the corruption and carelessness of his predecessors. Although the debt restructuring is still ongoing, the current outlook looks positive, with strides taken to get Zambia back on track and bring economic stability to the nation.