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.

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

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

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.

Zambian Kwacha is Africa’s Best Performing Currency in 2024

This year, the Zambian Kwacha has outperformed all other African currencies when compared to the US dollar, solidifying its position as the top performer on the continent. 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.

On 5th February, the country increased the minimum reserve ratio for lenders. The interest rates are currently the highest they have been in nearly seven years. By purposefully constricting the flow of funds the Kwacha has climbed in value. This has been further supported by  increasing the base interest rate just over a week later.

With the Kwacha strengthening, imports will become cheaper. As a country that relies heavily on exports for a range of necessities including fuel, foodstuffs, fertiliser, and vehicles, this is welcome news. Moreover, Zambian exports will similarly gain in value. These exports include Zambian copper, which accounts for 70% of the continent’s production, as well as gemstones, tobacco, and sugar.

Analysts have warned that the Kwacha’s positive streak—and sustainable growth of the currency—will occur only if the country can secure more international investment, something that is already being promoted across all sectors of Zambia’s economy. In particular, President Hichilema’s improvement in mining policy has attracted billions of dollars worth of international investment to the country, with the policies offering predictability and confidence.

Some optimistic projections see the Kwacha continuing to rise to 22 per dollar. In a note to clients, Mulenga Kawimbe, from the First National Bank of Zambia, stated that the bank believes “a break of the 22.00 level is possible.”

This economic engineering has boosted the Kwacha, breaking its steady decline for 75 consecutive days. Its largest fall occurred between October 16th and February 5th, dropping 21% against the US dollar.

Zambian officials have credited the currency’s fall to hampering international investment because of stalled debt restructuring talks. Since then, Secretary to the Treasury Felix Nkulukusa has assured that Zambia is “on course to reach a new agreement.”

Bill Gates-backed mining company discovers vast Zambian copper deposit

A mining start-up backed by Bill Gates and Jeff Bezos says it has discovered a vast copper deposit in Zambia, offering a potential boost to the west’s efforts to cut its reliance on China for metals that are vital to decarbonise everything from cars to power transmission systems.

KoBold Metals said on Monday that it had found Zambia’s largest copper deposit in a century, estimating that the Mingomba site in the northern Copperbelt province will become one of the world’s top three high-grade copper mines.

The discovery comes as the US government embarks on a charm offensive and infrastructure push in Africa in an effort to compete with China’s control over minerals that are critical for defence, renewable power and electric vehicles. The US government is backing the development of the Lobito railway, a line to transport metals in the region connecting the Democratic Republic of Congo and Zambia to the Lobito port in Angola.

While demand for copper is forecast to soar as countries set up efforts to electrify their transportation systems and pivot to renewable energy, the world’s largest mining companies are struggling to find high-quality assets.

Copper, which is widely used in construction and industry, is expected to undergo a boom in demand as it is heavily used in power transmission lines, electric vehicles and wind turbines.

“We’ve spent a year with the largest fleet of drilling rigs in Southern Africa,” Josh Goldman, founder and president of KoBold Metals, told the Financial Times. “We now know that Mingomba will be one of the very highest grade large copper mines when put into production and it’s very much like Kakula in scale and in grade.”

KoBold expects Mingomba will rival output at the deposit that is part of US billionaire Robert Friedland’s giant Kamoa-Kakula project in the Democratic Republic of Congo.

Backed by Breakthrough Energy Ventures, a climate change investment vehicle founded by Bill Gates, KoBold deploys artificial intelligence to scrape historical geological archives — including old PDFs and even maps hand painted on linen — and uses algorithms to help decide where to explore for minerals.

The California-based company is valued at $1.15bn, and also counts BHP, the world’s largest mining group, and oil major Equinor, as investors.

KoBold aims to start producing copper at the $2bn underground mine by the early 2030s.

The project is yet to conduct a pre-feasibility study, which provides early estimates of project costs and how economically the metal can be extracted.

If successful, the project would play a big role in meeting Zambian president Hakainde Hichilema’s ambition to more than treble the country’s copper output to 3mn tonnes by 2032, and help the nation dig its way out of debt.

Spending by the world’s biggest mining companies on copper exploration was small relative to volume of the metals the world was expected to need, Goldman said. Exploration companies, meanwhile, were struggling to raise capital because of interest rate hikes, he added.

“Exploration is where babies come from. You can help babies grow but you’ve got to get the birth rate up,” said Goldman. “That’s the hardest part: how do you find things in the first place.”

Goldman added that the company was evaluating a public listing in the next three or four years.

This article originally appeared on Financial Times

President Hichilema to Deliver Keynote at Mining Indaba 2024

Mining Indaba is honoured to announce that Zambia’s President Hakainde Hichilema will deliver a keynote address in 2024

Zambia’s President Hakainde Hichilema is set to deliver a keynote address at Mining Indaba 2024, demonstrating his unwavering dedication to revitalising his country’s mining sector and delivering jobs and economic growth to the people of Zambia.

This will be Hichilema’s second appearance at Mining Indaba as President, having delivered a keynote address in May 2022, shortly after his landslide election victory in 2021.

Since this historic election, President Hichilema has made quick progress towards achieving his objectives, implementing several measures to revitalise the mining sector in Zambia. Already the seventh largest copper producer in the world, Hichilema has set out to advance Zambia’s ranking with an ambitious goal of expanding copper production from 800,000 tonnes per year currently to around 3 million tonnes of copper by 2030.

Under Hichilema’s leadership, the Government of Zambia has reviewed the mining tax framework, ensuring a stable and competitive taxation system while eliminating double taxation. Furthermore, President Hichilema has personally spearheaded efforts to attract investment along the mining value chain, exemplified by the signing of a memorandum of understanding with the Democratic Republic of Congo to build a regional value chain for electric vehicle batteries. These initiatives have already yielded positive results, with major mining groups reinvesting in Zambia and the country's copper opportunities gaining renewed interest from global players.

During his keynote at Investing in African Mining Indaba, the President is expected to delve into the future of mining in Zambia, outlining his plans to expand copper production and position the country as a major player in the global mining industry. He will also address efforts for Zambian mining to expand into a wider array of critical minerals including cobalt, nickel and manganese. Furthermore, Hichilema’s speech will explore the potential for collaboration between the government, industry stakeholders, and investors, highlighting the need for partnerships to drive innovation and maximise the sector's socio-economic benefits.

Just two years into Hichilema’s presidency, there have already been numerous positive developments in Zambia’s mining industry. Since 2019, Barrick’s Lumwana mine has contributed nearly US$3 billion in taxes, royalties, and local employment. In October 2023, the company made clear its support for the Zambian economy by announcing it will invest almost $2 billion to expand Lumwana and increase its annual production to an estimated 240,000 tonnes of copper. This will elevate a once unprofitable operation into one of the world’s foremost copper production facilities.

Similarly, a $100 million investment by First Quantum Minerals (FQM) has successfully brought the Enterprise Nickel Mine – Africa’s largest nickel producer – online. Meanwhile, FQM’s $1.25 billion expansion to its Kanshansi Copper Mine – announced at the Investing in African Mining Indaba 2022 – is expected to create nearly 2,000 jobs in Zambia.

Hichilema’s visionary and steadfast leadership has also encouraged new players to make their mark in Zambia. California-based Kobold Metals, which is backed by tech titans including Bill Gates and Jeff Bezos, is working to start producing copper and cobalt at its project in Zambia. The company has so far invested $150 million to accelerate its search for high-quality metal deposits located in the famous Copperbelt.

Other newcomers include Abu Dhabi’s International Resources, who in December 2023 announced a $1.1 billion investment in Mopani Copper Mines, funding the mine’s expansion plan and increasing copper production to 200,000 tons in the next three years.

President Hichilema’s leadership has galvanised not just the mining industry but also related industries that provide much needed infrastructure and support to the extractives sector. On 26 October, his government signed a memorandum of understanding with the United States and European Union to develop the Lobito Corridor and build a new Zambia-Lobito rail line. This includes a $ 250 million investment by the United States and will deliver an enormous boost to intra-regional trade, as well as stimulating growth and job creation within Zambia.

Mining Indaba 2024's theme is 'Embracing the power of positive disruption: A bold new future for African Mining'. Zambia’s re-emergence as a top investment destination of choice for mining investors demonstrates that positive disruption can deliver positive results and Mining Indaba is excited to provide opportunities to understand the country’s successes and processes for achieving this.

First Quantum agrees with Zambian firm to fast-track copper project

LUSAKA, Dec 4 (Reuters) - Canada's First Quantum Minerals (FM.TO) and a Zambian mining company have signed an agreement to fast-track the development of a copper project in Africa's second-biggest producer of the metal, the companies said on Monday.

Zambia has ambitions to triple its copper output and has reviewed its tax policy to increase mining exploration and output.

First Quantum is already a major miner in the southern African country.

ts agreement with Zambia's Mimosa Resources envisages mining at the Fishtie copper project starting from 2026, ramping up to maximum production of 30,000 metric tons of copper a year by the end of the decade, First Quantum and Mimosa Resources said in a joint statement.

First Quantum reiterated it thought the investment climate in Zambia had improved.

Mimosa Resources is expected to lead the raising of a total investment of $200 million for the project.

Two years of HH has brought a wave of optimism to Zambia

Analysts anticipate that mining investors will flock to Zambia, still one of the biggest copper producers globally, especially since President Hakainde Hichilema came into office in August 2021 and announced a range of incentives, such as a sliding royalty rate for mines, to lure back investors.

Hichilema, or ‘HH’ as the investor community call him, has announced that he wants Zambia’s mining sector to be the country’s foremost revenue generator. He subsequently set a target to increase its copper production from 800,000 tons a year to three million tons a year in the next three years – a bold aim, especially since the Konkola and Mopani copper mines haven’t resumed production yet.

But overall, Zambia’s mining sector appears to be on track for renewed activity from international mining companies. In 2022, First Quantum Minerals announced $1.35bn worth of new projects in the country, while Anglo American announced a return to full-scale copper exploration after it signed a provisional joint-venture agreement with Aim-listed mining and exploration company Arc Minerals. In addition, KoBold Metals, a Californian-based metals explorer, is busy raising $200m to develop the copper reserves it recently acquired in Zambia, the Wall Street Journal reports.

The projects announced by both these miners are a sure vote of confidence in the Hichilema administration.

Exploration is an equally important aspect of Hichilema’s investment drive into Zambia’s minerals sector and the government is currently doing geological mapping for the remaining 45% of the country, while the existing 55% will be updated.

Unfortunately, Hichilema has also had to deal with numerous problems since he took over the reins from the Lungu presidency, an era in which mining companies faced insecurity of tenure, high royalty rates, and the withholding of VAT refunds.

Delivering on promises has been harder and slower than anticipated, says Marcus Courage, CEO of Africa Practice. It has involved drawn-out negotiations with creditors for debt restructuring, cleaning up the country’s cadastral system after widespread licensing corruption, restructuring Mopani, settling the Konkola disputes, and addressing the power crisis. “These things are all taking much longer than anticipated,” says Courage.

The mining cadastre was subject to a detailed audit over eight months. They went through every single major licence with a fine toothcomb and threw out those that hadn’t been properly awarded – Nick von Schirnding

The administration is doing its best to clean up various practices and set the country on a new course, says Nick von Schirnding, director and executive chairperson of Arc Minerals. “But changing a supertanker takes time.”

Investor perception also takes time to change, and the dubious way in which mining and exploration licences were acquired under the Lungu presidency could still deter investors. Also, under previous presidencies, mining rights were at times taken away. “This can put investors off. Once bitten, twice shy,” said one mining executive who asked to remain anonymous.

The best thing Zambia can do for its investor community is secure a stable policy environment, even though its taxes are some of the highest in the world.

Peter Leon, partner and Africa chairperson at Herbert Smith Freehills, said the country’s debt issues have not been a significant deterrent for would-be investors, but rather its ever-changing royalty rates, which needs to be fixed.

Leon’s view is that Zambia’s mineral legislation is sound, the government is committed to good governance and the rule of law, while the country has a lot more policy certainty than South Africa.

Time is of the essence though. There is a question mark over how realistic a three million tons a year copper production target is, says Leon. He also notes that Hichilema has two years left in office and if the economy hasn’t grown as he has promised he might not be re-elected, although Zambia’s recent debt deal is just what is needed.

A rosy future?

The good news is that, after lengthy negotiations that lasted close to three years, Zambia finally secured a deal on 22 June to restructure its more than $6bn debt. In terms of the restructuring agreement, Zambia’s debt will be rearranged over more than 20 years with a three-year grace period during which only payments on interest are due, Reuters reports. The agreement with its official creditors means the country will receive a $188 million loan from the International Monetary Fund as part of a $1.3bn package that was approved in August 2022.

There are also indications that the long-standing issues with Konkola and Mopani respectively will be resolved by the end of 2023. An insider close to the process said an agreement between Vedanta and Zambia Consolidated Copper Mines, which is 77%-government-owned, is imminent on Konkola. “In government we’re saying: ‘You can’t mine in the courts.’ You have to be pragmatic. The negotiations have been difficult, but the intention is to reach an agreement by the end of the year.”

Konkola currently produces less than 100,000 tons of copper a year, because of a lack of investment. But once a deal has been concluded, the Konkola Deep Mining Project, which has a nameplate capacity of 300,000 tons a year, can be initiated.

With Mopani the process is less complicated, and the Zambian government is currently in possession of bids from four shortlisted potential buyers: China’s Zijin Mining and Norinco Group, Sibanye- Stillwater, and an investment vehicle owned by former Glencore employees. A final bid will take place in mid-July and a deal is expected to be in place in October this year. Mopani’s production is currently around 80,000 tons a year – a far cry from its potential 225,000 tons.

“We have seen similar moves in Botswana and Namibia towards transparency through a public mining cadastre — and even some movement in South Africa in this direction. So Zambia’s success in rolling out this facility certainly seems to be having a positive effect across the region — Desmond Mossop, SRK.

Both Konkola and Mopani are in the fortunate position that they’re not resource-constrained and with more investment, production could be ramped up.

With the clean-up of Zambia’s mining cadastral portal completed, the country is well-positioned to attract new investment, says Courage. “The queues outside the cadastre office stretched around the block.”

“We have seen similar moves in Botswana and Namibia towards transparency through a public mining cadastre — and even some movement in South Africa in this direction,” says SRK Consulting partner Desmond Mossop. “So Zambia’s success in rolling out this facility certainly seems to be having a positive effect across the region.”

Von Schirnding says he is thoroughly impressed with the speed with which the Zambian government is turning things around. “The mining cadastre was subject to a detailed audit over eight months. They went through every single major licence with a fine toothcomb and threw out those that hadn’t been properly awarded. They replaced almost the entire staff complement of that office. It’s real proof that there’s a desire to change.”

Zambia and the DRC’s plans for collaboration on electric vehicle battery production are also gaining momentum, with the US and Afreximbank “waiting in the wings” to provide concessional funding. Feasibility studies are being conducted to establish two special economic zones for battery manufacturing purposes, Courage adds.

“Many of the world’s largest mining companies like what they hear from Hichilema. They see a government that understands the needs of investors. The president recognises the opportunity to capitalise on the surging demand for copper,” says Courage.

Hichilema is a breath of fresh air, says Von Schirnding. “The government is being very sensible and proactive. When you operate in any jurisdiction you need an established mining framework which governs the awarding of licences and mining regulations. The second thing is you need the rule of law that will enforce those regulations. Those are the key building blocks when entering into any country.”

This article originally appeared on Mining MX.

Hichilema optimistic BRICS bloc will benefit African continent

Zambian President Hakainde Hichilema says the BRICS bloc will help African countries address the challenges the continent has been battling with over the past years.

Hichilema was addressing world leaders attending the 15th BRICS Summit aimed at strengthening the trade bloc.

The Summit is taking place at the Sandton Convention Centre in Johannesburg.

Leaders have been discussing the role of Africa in relation to strengthening relations between BRICS and Africa.

The Zambian President reiterated calls by other leaders that new reforms are needed in order to address inequalities of the past.

Hichilema says, “We as Zambia see this as a real opportunity to address challenges we kept on talking about for a long time and on many platforms. We need to reform the global world order in particular to address the inequalities associated with critical ingredients to development such as capital.”

The Zambian leader has urged BRICS leaders to fast-track the advancement of technology in the African continent.

He says without access to technology, countries can’t engage in genuine and mutually beneficial partnerships.

Earlier during a media briefing, BRICS Chairperson President Cyril Ramaphosa said BRICS was committed and supported the digital transformation.

“We support the digital transformation in education and TVET space, as each BRICS country is domestically committed to ensuring education accessibility and equity and promoting the development of quality education. We agree to explore 23 opportunities on BRICS digital education cooperative mechanisms, hold dialogues on digital education policies, share digital educational resources, build smart education systems, and jointly promote the digital transformation of education in BRICS countries,” adds Ramaphosa.

Hichilema also used the opportunity to call for peace in the African continent.

The bloc has also called on leaders to resolve conflicts through dialogue.

“Dialogue among political parties of BRICS countries plays a constructive role in building consensus and enhancing cooperation. We note the successful hosting of BRICS Political Parties Dialogue in July 2023 and welcome other BRICS countries to host similar events in the future,” adds Ramaphosa.

The African continent continues to experience conflicts.

In July, Niger President Mohamed Bazoum was overthrown following a coup by mutinous soldiers.

Meanwhile, in Sudan, more than 1 million people have been forced to flee Sudan to neighbouring states.

According to the United Nations, people inside the country are running out of food and are dying due to a lack of healthcare after months of war.

This article originally appeared on SABC News

Britain agrees deals on clean energy, critical minerals with Zambia

LONDON, Aug 3 (Reuters) - Britain on Thursday said it had agreed deals with Zambia on clean energy and critical minerals as foreign minister James Cleverly ends a four-day visit to Africa to deepen ties.

Cleverly has used the trip, which fell shortly after a coup in Niger, to seek to enhance Britain's sway in Africa, welcoming regional talks on the Niger crisis and announcing support for Nigeria's agriculture sector.

The foreign ministry said Cleverly would agree a UK-Zambia Green Growth Compact, aimed at generating 2.5 billion pounds ($3.17 billion) of British private sector investment in Zambia's mining, minerals and renewable energy sectors alongside 500 million pounds of government-backed investments.

"The UK-Zambia Green Growth Compact and our landmark agreement on critical minerals will support investment between UK and Zambian business, creating jobs in both countries," Cleverly said.

Zambia is a major copper producer, and also has deposits of critical minerals such as cobalt, manganese and nickel. Last year Britain emphasised the importance of diversifying its supply chains in a critical mineral strategy.

Cleverly will visit a copper mine in Zambia and sign a memorandum of understanding (MoU) on critical minerals, which Britain said would "lay the foundation for further UK support for the responsible mining of copper, cobalt and other metals essential to the global clean energy transition."

Britain has agreed to deepen collaboration on critical minerals with other countries such as the United States, Japan, Australia, Kazakhstan and Saudi Arabia.

This article originally appeared on Reuters

Barrick’s Lumwana copper mine in Zambia gearing up for the future

Barrick’s drive to transform the Lumwana copper mine in Zambia into a Tier One asset with a life extending beyond 2060 is picking up speed with a strong performance in the past quarter adding impetus to its continuing production ramp-up.

Briefing media at a site visit here on July 7, Barrick President and Chief Executive Mark Bristow said the mine’s full potential was only now being revealed. Additional expansion opportunities, identified through an updated geological model, are currently being assessed, while drilling at the Kababisa prospect highlights potential mining flexibility through higher grades. The Lumwana pre-feasibility study is progressing in line with its plans to transform its long-term copper profile through the delivery of the envisioned super pit.

“Since Barrick refocused its strategy in Africa in 2019, Lumwana has become a key element in the expansion of our strategic copper portfolio and a significant contributor to our bottom line. At the same time its importance to Zambia has grown. Since 2019 it has contributed more than $2.3 billion to the country’s economy in the form of royalties, taxes, salaries and purchases from local suppliers,” he said.

Barrick has a global policy of sourcing its suppliers locally and last year it spent $432 million, 83% of its total procurement, with Zambian suppliers and contractors. It has also launched a ‘Business Accelerator Program’ to build the capacity of Zambian contractors in the mining supply chain.

Similarly, Barrick is committed to local employment. Currently 99.3% of Lumwana’s employees and 98% of its contractors are Zambian nationals, both industry-leading statistics. Lumwana is a participant in the United Nations’ REDD+ project, which is designed to reduce greenhouse gas emissions from deforestation, and the mine has engaged with its communities on this initiative.

Looking at the mine itself, in the presentation accompanying the announcement, Barrick said that Lumwana is on track to achieve 2023 production guidance as the operation ramps up after the wet season, reopens the Malundwe pit, and smoothly transitions to owner miner operations. There is also a plan to to transition away from contract mining in 2023 – with an investment of US$115 million being allocated to implementation of an owner miner waste stripping fleet.

Barrick recently stated: “During the fourth quarter of 2022, we began a transition to an owner miner fleet at Lumwana following a study which concluded that this option could result in a 20% cost reduction within the first five years versus contracted services. Separately, an owner miner strategy positions the operation well for future potential expansions including the Super Pit, which has the potential to extend Lumwana’s life into the 2060s.”

From the processing side, there has been a continuous improvement of processing stability leading to higher throughput and the mine is working to exceed the new base set as it moves into the second half of 2023. Recovery has also stabilised following the higher blend of fresh ore from the pit as mining ramps up. Significant investment has been made over the last few years in the new fleet leading to continuous improvement in availabilities, with the latest batch coming into production in April 2023. A new stripping fleet started arriving in Q2, which will continue throughout the year and is expected to see the stripping increase with the fleet arrivals.

Mining originally began at the Malundwe pit in 2008 by Equinox Minerals (Barrick acquired Equinox in 2011), and the operation ran successfully for some years as a trolley assist mine, with trucks going up ramp to feed a primary gyratory, then the ore utilising a 4.5 km conveyor to the plant. The lower grade Chimiwungo or ‘Chimi’ pit (in fact now three separate South, Main and East pits) some 7 km away was then developed starting with South in 2012 and a new primary gyratory crusher and its own 3.5 km conveyor built to allow the Chimi pit to feed the existing plant. Malundwe and Chimi both operated for some years – Malundwe was higher grade but the initial pit closed due to being mined out leaving only the Chimi operation. Malundwe is now set to be reopened and expanded.

Planned Lubwe starter pits to the north could potentially provide a high-grade, low strip ratio plant feed further enabling the unlocking of the value within the envisaged Chimiwungo Super Pit and the potential 40-60 year mine life. Two other prospects – Kamaranda and Kababisa have potential as additional satellites. The Super Pit PFS began in Q4 2022.

The mine initially operated with a fleet of 31 Hitachi 254 t class EH4500 trucks and five 27 m3 EX5500 shovels – four of them face shovels and one backhoe.  Trolley assist was discontinued after mining moved from Malundwe pit. Barrick told IM that the main ramp to Malundwe is equipped with the trolley lines which are still in place however the pantographs were removed from the EH4500 trucks as they are now operating under full diesel power.

The current EH4500 trucks are reaching end of life and a competitive fleet replacement tender was held in 2021 where the Komatsu 290 t class 930E-5 was selected as the main new fleet truck type, with the EH4500s gradually being phased out. There are 15 of there running currently – the final new fleet will be a combination of 930E-5 and Hitachi EH5000 trucks – 30 in total. Four of the EX5500 shovels have been retired and one remains. The mine now operates three Komatsu PC8000 and three PC7000 shovels.

With emissions targets set by Barrick just as other top tier miners, IM asked if there was any plan to look again at running a trolley line: “In line with our commitment to reduce green house gas emissions we are in close discussions with our technology partners and OEMs on how to substitute fossil fuel with renewables. The feasibility of trolley assist is under investigation and consideration to ramp design is part of the expansion PFS that is underway.”

Aside from adding new equipment, Barrick added that its people are its greatest assets and training and upskilling is of cardinal importance. “This process starts with modern simulators we acquired to ensure that we can pick those with the best potential and continuously hone their skills to ensure they get the best out of our new assets. We have also reviewed our maintenance practices in close collaboration with our OEMs and sister operations in NGM to learn from past experiences.”

This article originally appeared on International Mining.

Great Future Beckons for Lumwana as Barrick Unlocks Potential

Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) – Barrick’s drive to transform the Lumwana copper mine into a Tier One asset with a life extending beyond 2060 is picking up speed with a strong performance in the past quarter adding impetus to its continuing production ramp-up.

Briefing media at a site visit here today, Barrick president and chief executive Mark Bristow said the mine’s full potential was only now being revealed. Additional expansion opportunities, identified through an updated geological model, are currently being assessed, while drilling at the Kababisa prospect highlights potential mining flexibility through higher grades. The Lumwana pre-feasibility study is progressing in line with our plans to transform its long-term copper profile through the delivery of the envisioned super pit.

“Since Barrick refocused its strategy in Africa in 2019, Lumwana has become a key element in the expansion of our strategic copper portfolio and a significant contributor to our bottom line. At the same time its importance to Zambia has grown. Since 2019 it has contributed more than $2.3 billion to the country’s economy in the form of royalties, taxes, salaries and purchases from local suppliers,” he said.

Barrick has a global policy of sourcing its suppliers locally and last year it spent $432 million, 83% of its total procurement, with Zambian suppliers and contractors. It has also launched a “Business Accelerator Program” to build the capacity of Zambian contractors in the mining supply chain.

Similarly, Barrick is committed to local employment. Currently 99.3% of Lumwana’s employees and 98% of its contractors are Zambian nationals, both industry-leading statistics.

Lumwana is a participant in the United Nations’ REDD+ project, which is designed to reduce greenhouse gas emissions from deforestation, and the mine has engaged with its communities on this initiative.

Zambia Debt Restructuring: What You Need To Know

On 22 June, Zambia announced that it had reached an agreement on comprehensive debt treatment according to the G20 Common Framework, just over 30 months after first defaulting on its debt. But what are the terms of the new debt arrangement?

How Much Does Zambia Owe?

Major bilateral creditors, including France and China, have agreed to restructure loans totalling to $6.3 billion.

Among the deals’ clauses was an obligation for “comparability of treatment for Zambia’s commercial debts”, guaranteeing that the $6.8 billion owed to private sector creditors would also be restructured according to the G20 Common Framework.

In total, $13.1 billion will be restructured under the deal.

How Will These Be Paid Off?

Zambia’s debts have been reorganised to be paid over a 20-year period with a three-year grace period. Zambia will only have to pay the interest rate on its loans until 2026, and will have until 2043 to conclude debt repayment, an extension of the previous deadline by 12 years.

Zambia’s rate of interest will be capped at 1% until 2037, and will rise to a maximum of 2.5% for the remainder of the loan. Zambia has been paying an average of 3.9% on its Chinese bilateral loans. Interest rates may rise to a cap of 4% if Zambia is upgraded from a low to medium debt carrying capacity.

 Also included in the restructuring is a loan to cover the ongoing construction of the Kafue Gorge Lower hydroelectric powerplant.

 What Does This Mean For Zambia

The deal also means that Zambia has fulfilled the requirements for the IMF to disburse its second instalment of $188 million agreed in April, which will be injected directly into the Zambian economy.

 When President Hichilema returned to Lusaka’s Kenneth Kaunda International Airport, he said that the deal created the conditions necessary for Zambia to “rebuild confidence in our economy, attract foreign investment, and unlock the potential of our natural resources”.

 Analysts expect Zambia’s bondholders to also strike a debt restructuring deal with the government in the coming weeks. This would secure a plan to pay back some $3 billion owed to private lenders. Optimism is particularly high after the bilateral debt deal saw the Zambian government pledge to speed up its repayments as the economy improves.

Debt Restructuring Deal Puts Zambia Back in the Champions League

After months of build-up and years of waiting, Zambia has arranged a historic deal to restructure more than $6 billion in debts owed to foreign creditors.

The deal, which will rearrange the structure of the money lent bilaterally to Zambia by nations including China, marks the first major debt relief assigned to a developing country within the Group of 20 (G20)’s Common Framework. Public sector creditors have agreed to reschedule $6.3 billion of debt, $.1.3 billion of which were accrued arrears.

The news was announced by a French official, and later confirmed by Zambia’s finance ministry, ahead of the Globate Climate Finance conference being held in Paris. The summit’s aims include combatting poverty, fighting climate change and reaching “climate solidarity” between developed and developing nations. The same official disclosed that the Memorandum of Understanding contains a clause “requiring comparability of treatment for Zambia’s commercial debts”, guaranteeing that private sector creditors will follow the G20 Common Framework and restructure the $6.8 billion they are owed, meaning that a total of $13.1 billion in debt is to be repackaged.

Presidents Macron and Hichilema greet each other outside the conference. (Hakainde Hichilema / Facebook)

Details are expected to emerge in the coming days once Zambia has formally accepted the debt relief, but an anonymous member of the Paris Club confirmed that China and India had agreed to terms with traditional creditor nations of the Club. It is further understood that the creditors have unilaterally agreed to extend the repayment deadlines for loans by 20 years, with an initial three-year grace period also among the terms. 

The memorandum that will be signed will be historic for a number of reasons. The relief will address the debt Zambia incurred when it became the first African nation to default on COVID pandemic-era national debt; the arrangement is the first significant restructuring agreed within the G20 Common Framework; and the deal is likely to lead the way for other struggling nations, including Ghana, Sri Lanka and Ethiopia, whose talks with major creditors have all recently stalled in similar fashion to those of Zambia in the spring.

Janet Yellen, the U.S. Treasury Secretary, mentioned that debt relief was an urgent priority for Ghana and Sri Lanka upon arriving in Paris on Wednesday, when she hinted at Zambia’s debt deal being “very close”. Yellen has been a central figure in the revitalisation of multinational discussions on Zambian debt resolution, and drew attention to the urgent need for round-table talks during her visit to the nation as part of her January 2023 tour of Africa.

Secretary Yellen with President Hichilema during her tour of Africa in January 2023 (Saul Leob / Getty Images)

The deal has yet to be signed; its announcement, nonetheless, has had an immediate and profound impact. Zambia’s currency has rallied 12% this month, making the kwacha the fastest-growing of the 150 currencies monitored by Bloomberg. The 12% increase is the greatest growth the kwacha has enjoyed in more than 7 years. Zambia’s eurobonds, meanwhile, have returned 10.1%, a figure bested only by El Salvador and Argentina.

In October, Zambia’s treasury secretary, Felix Nkulukusa, said that the country was seeking to restructure 12.8 billion in external debt. Nkulukusa also explained that reducing foreign holdings of domestic debt would release funds for other creditors such as China. It is suspected that a significant portion of this initial $6.3 billion package will be committed to servicing debt holdings.

The Paris Club official also disclosed that the $4.1 billion owed to the national Export-Import Bank of China formed the majority of the $6.3 billion package, which is publicly known to have been funds owed to government bodies. They added that Beijing was wary to be seen holding up debt relief for Zambia at a summit attended by 40 world leaders designed to ease debt burdens for developing nations and free up finances for climate initiatives. President Macron’s meetings with Chinese authorities in Beijing in April are understood to have had a significant impact on yesterday’s final talks.

Presidents Macron and Xi in April. (Eliot Blondet / Sipa USA)

Eswar Prasad, professor of economics at Cornell University, said that China’s “endgame seems to be a resolution that limits its financial losses while spreading more broadly the blame for the distressing and untenable situation that many highly indebted economies find themselves in”. The International Monetary Fund has estimated that 70 of the lowest-income nations are burdened by a collective $326 billion in debt; more than half of those same nations are in, or reaching, debt distress.

Ghana and Ethiopia have been locked in talks with creditors for months, their debts dominated by loans from China. It is hoped a solution to their plight will be agreed by the conference’s conclusion.

The scale of Zambia’s debt had been a cause of concern for major Zambian creditors and potential investors, compounding its repercussions. Financing assurances were provided by Zambia’s biggest creditors in July 2022; reports in January 2023 expected restructuring to take place in March. In May, two months after debt relief was supposed to have been arranged, Zambia’s central bank was forced to raise inflation by 25 basis points to 9.5%. Growth in 2022 reached 4.7%, despite Zambia’s distressed status, but forecasts expected a drop to 3.6% in 2023. The IMF guaranteed a $188 million financing disbursement in April 2023, to be released once debt was restructured; Zambia has been waiting patiently for this immediate boost to their economy ever since.

Finance Minister Musokotwane during July 2022 negotiations. (Zinyange Auntony / Getty Images).

Kristalina Georgieva, managing director of the IMF and another vocal supporter of Zambia, issued a statement on Thursday, which read, “Today we will talk about Zambia, which I think is a great case of celebration because it makes debt restructuring agile and effective”. Visiting Lusaka in January 2023, Georgieva committed to assisting “Zambia on its journey towards a more resilient and inclusive future”. She said that she was “hugely impressed by Zambia’s enormous potential given its rich endowment of natural resources, and a dynamic and entrepreneurial youth population”. She praised Zambia’s “efforts to improve the use of public resources by reallocating resources from poorly targeted and inefficient spending and redirecting them to much-needed spending on education and health”, and asked creditors for “swift resolution of its debt situation to complement these reform efforts and preserve the positive growth momentum”.

In April, Georgieva accompanied a trip of IMF staff to Zambia, and told reporters that “The ball is truly in the court of the creditors”. Georgieva and the IMF’s unrelenting support for Zambia has been critical in adding much-needed optimism to the discussion of Zambia’s debt relief and highlighting the role that China and private creditors could play in Zambia’s return to economic good health.

IMF Managing Director Georgieva in Chongwe, Zambia. (Kim Haughton / IMF)

This morning, Hakainde Hichilema, President of Zambia, spoke before delegates at the New Global Financing Pact at Palais Brongniart, Paris. He thanked Presidents Macron and Xi, along with other major creditors. Hichilema concluded his speech with a familiar refrain: “Zambia is back in the Champions League”.

The World Is Coming To Zambia

By Albert Halwampa, Director General of the Zambia Development Agency

May has been a milestone month for the Zambia Development Agency.

On May 1, President Hakainde Hichilema officiated at the ground-breaking ceremony for the construction of the United Capital fertiliser plant, a project worth $600 million that was facilitated by the Zambia Development Agency (ZDA). Fittingly, the ceremony took place on International Labour Day. The urea and ammonium plant is just the latest in a series of high-value infrastructure investment partnerships specifically designed to boost the Zambian economy whilst guaranteeing long-term sector sustainability, infrastructural enrichment and stable local employment.

The signing of a memorandum of understanding between the ZDA and Invest Africa on the sidelines of the Africa Debate in London. 

On May 4, as Director General of the ZDA, I was delighted to announce a record high projected investment for Q1 of 2023, with investment ventures worth $8.57 billion secured. This represents a nearly 3,500% increase compared to the same period last year. All in all, 81 investment ventures were undertaken in Q1 of 2023, compared to 74 in Q1 of 2022. Not only, therefore, have the overall volume of investments grown but the average financial commitment of each investment has also reached new heights.

As a direct result of these investments, 13,435 new jobs will be sustained. Furthermore, the $8 billion worth of investments earmarked for the energy sector will help fulfil our commitment to Zambia’s energy security and empower Zambians to fulfil their potential in every segment of the economy.

In line with the New Dawn government’s pledge to make Zambia a regional and continental economic powerhouse, we were also pleased to announce that the ZDA has facilitated market access for 20 exporters to potential buyers, and has audited 101 exporters in the Copperbelt, Lusaka and Eastern Provinces.

Further afield, this month I had the pleasure of attending the Africa Debate at the Guildhall in London. With me, alongside a number of other Zambian businesspeople and ministers, was President Hichilema, who in his keynote speech reminded investors that Zambia is “looking for mutually beneficial partnerships”.

President Hichilema at the Zambia Investment Forum, hosted by Invest Africa.

This conference was not only a chance to showcase how far Zambia has come but also an opportunity to further advance our fortunes as a nation. Meetings at the side-lines of the Africa Debate and the Invest Africa Zambia Investment Forum have so far yielded deals with some 162 companies, including a memorandum of understanding with Invest Africa itself to promote foreign direct investment from the UK into Zambia.

I was proud to sign this MoU myself, together with IA chairman and former Africa Minister the Rt Hon. Mark Simmonds. The agreement is yet another indicator of the strong bonds between the ZDA and Invest Africa, as well as Zambia’s longstanding partnership with the UK, and I look forward to welcoming the businesses and financiers that come to Zambia as a result of this close cooperation.

Also agreed within the MoU were provisions to mobilise investments from Europe, the United States of America, the Middle East and Africa, and to continue to hold promotional activities in Zambia and the UK on a reciprocal basis. The sectors likely to benefit the most from our continued partnership with Invest Africa are Agriculture, Energy, Mining and Tourism – all of which are critical to Zambian employment and localised economic enrichment. 

Delegates at the business forum in Lusaka, co-hosted by the ZDA and Etion.

On May 18, the ZDA hosted a business forum in partnership with Etion, a business delegation from Belgium in Lusaka. A business-to-business (B2B) meeting was held, along with a networking session, to encourage business linkages and joint ventures between Zambian and Belgian enterprises. So many European investors are excited to deepen ties with Zambian business and industry and I have no doubt that investment summits such as this will continue to enjoy enormous success.  

It is a very exciting time to be at the helm of the ZDA, a fantastic moment to be investing in our country, and a proud moment to be Zambian. We look forward to the results of Q2, continue to plan more investment summits, and eagerly anticipate forging new business ties and solidifying those we have already established.

Zambia is Ready for Business, Assures President Hichilema

Last week was a busy week for Zambia’s President Hakainde Hichilema and one that is already being considered a significant milestone in the country’s return to economic stability and prosperity. The President accepted an invitation to attend the coronation of King Charles III on Saturday 6th May and made the most of his trip by pursuing a week of business talks with delegates and investors across the UK and France.

 President Hichilema announced on Friday evening that “After a week of over 20 successful meeting and engagements in England, Scotland and France, we have departed from London and are heading back home. We are positive that these engagements will yield positive growth and development for the Zambian people”.

President Hichilema, spotted at Heathrow airport on his way back to Lusaka.

On Tuesday, 9th May, President Hichilema met with the CEO of the UK government’s finance institution, British International Investment (BII), Nick O’Donohue. BII has to date invested more than $100 million in the Zambian economy, especially in the agricultural, energy and economic sectors. President Hichilema assured Mr O’Donohue that the BII’s “investments are safe”, and that Zambia was “looking for mutually beneficial partnerships based on common values and interests for the people of Zambia and the UK”.

 On Wednesday, 10th May, President Hichilema held a meeting with Scotland’s First Minister, Humza Yousaf, to strengthen bilateral ties between the nations; HH was delighted to announce that Scotland had committed £1 million to the construction and maintenance of an academic economic research facility in Zambia.

 That afternoon, Mr. Hichilema met with Emmanuel Macron, President of France, who sits on the board of the Paris Club of Creditors and the G20 intergovernmental forum. Also present at the meeting were Zambia’s Ministers of Foreign Affairs and International Cooperation, Stanley Kakubo, and of Finance and National Planning, Situmbeko Musokotwane, and some have speculated that some significant trade agreements were tabled at the meeting. All President Hichilema was willing to tell the press was that state debt relief and investment were discussed, and that the meeting was successful.

Presidents Macron and Hichilema before their meeting.

 After a number of days of meeting with world leaders, CEOs of global financial institutions and economic experts, President Hichilema headed to the Zambia Investor Forum and Africa Debate in London on Wednesday and Thursday, both organised by Invest Africa, to speak with prospective investors. Mr Hichilema began his keynote speech on Wednesday by reiterating that his government was “committed to reforms – after all, we were elected on a ticket of change, to improve the lives and livelihoods of our people […] through the economy”.

President Hichilema delivering his keynote speech.

 President Hichilema said that his government would pursue private sector partnerships to improve the economy and, therefore, the wellbeing of Zambia and its people. He said that the New Dawn government had shown “clear intent” in its meetings with the International Monetary Fund, a major U.S. financial agency and institution which has been pushing for creditors to agree to a framework for Zambia’s debt relief.

Finance Minister Situmbeko Musokotwane urged major investors and economic gurus present at the event to “push for this debt relief to take place”, as Zambia had met all requirements set out in the framework submitted by creditors. Zambian and Western financial figures alike have been frustrated by an apparent reluctance from Chinese creditors to agree to debt relief, though the state visit of President Hichilema and Ministers Musokotwane and Kukubo may prove to be what is needed to move talks forward.

Commerce, Trade and Industry Minister Mulenga announced that the government had set aside 800,000 hectares of land for agricultural development. Zambia enjoyed a record maize harvest last year and will be hoping to shatter that record after receiving assistance from a multi-partner group led by USAID (the United States Agency for International Development) that has put in place the necessary infrastructure to fight against transport issues that have historically contributed to 30% of Zambia’s post-harvest losses. Seven Smart Integrated District Aggregation Centres (SIDAC) have been built to process and store 100,000 metric tons of maize and other grains that would otherwise go to waste. National and international initiatives have also successfully raised awareness about crop diversity in the country, ensuring agricultural stability, sustainability and soil re-enrichment.

Minister Mulenga at the Zambia Investment Forum.

Foreign Affairs Minister Kakubo also reminded investors that Zambia’s vast quantities of minerals “are in the ground, and most of them are not yet explored”. The exploration that has been done shows that Zambia has 6% of the world’s copper reserves and huge deposits of cobalt: two metals that will continue to grow in value as the world transitions to green energy and electrically-powered vehicles.

Zambia is also known for its rich deposits of gold, iron, nickel, manganese and emeralds. The country is the world’s seventh-largest producer of copper, the sixth-largest producer of cobalt, and boasts the largest emerald ever mined. The New Dawn government has recognised the potential for its mineral reserves to transform the nation’s fortunes, making mining one of the primary sectors driving economic growth and benefitting people across the country. Kakubo stressed that he and other senior figures in the mining industry were looking for partnerships to aid exploration into mineral deposits and expansion of the country’s mines. In May 2022, First Quantum Minerals approved plans for a $1.25 billion expansion of the Kansanshi copper mine after “renewed confidence” in Zambia’s economic climate, and other major deals have followed since. 

On Thursday, President Hichilema attended Invest Africa’s Africa Debate, an investment summit focused on the African continent whose themes included “the future of African trade, discussing and debating the continent’s trade profile”. Mr. Hichilema gave a keynote speech alongside Andrew Mitchell, the UK Minister of State in the Foreign, Commonwealth & Development Office (FCDO). With a touch of humour, Mr. Hichilema spoke of the importance of education, saying that without the education he had received, instead of being President of Zambia he would “be in the village with 8 or 10 wives”. He reminded the audience that waning diplomacy, the decline of democracy and insufficient protection of human rights were not good for business, highlighting the importance of “peace, security, stability”. He said it was the responsibility of those in power to create a landscape that invited investment and economic growth.

President Hichilema deep in conversation at the Africa Debate.

Karen Taylor, CEO of Invest Africa, who hosted the Investor Forum event, said that “since President Hichilema took office in August ’21, Zambia has undergone a significant shift, change and focus in its economic policies and its approach”. She said that Invest Africa would continue to market Zambia as an investment destination, and that the steps taken by the government had been a significant factor in many organisations’ decision to invest in Zambia. Ms. Taylor applauded the economic reforms the UPND government had made, insisting that this had created an “enabling environment” for foreign direct investment. Mr. Hichilema said after the event that he was “humbled by the huge interest” in Zambia’s economy, and the attendance of “hundreds of key business players from various economic sectors”.

 During the Zambia Investor Forum, Zambian Ministers “held a series of meeting with key players in the agriculture, tourism, mining, infrastructure, and energy sectors”, negotiating “investment in our country that will create opportunities and jobs for our citizens,” said Mr. Hichilema. After the event, Mr. Hichilema met with UK Foreign Secretary, James Cleverly, who “expressed how impressed the UK is with Zambia’s development trajectory”, and “reaffirmed the UK government’s support for Africa to have a bigger voice at the G20”. President Hichilema said the meeting was productive, and promised that the government would “continue to encourage joint ventures to ensure that these investments benefit as many of our people as possible”.

President Hichilema with Minister Cleverly at their meeting.

Zambia’s GDP to Grow by 4.2% in 2023

Secretary to the Treasury, Felix Nkulukusa, announced yesterday that Zambia’s economy is projected to expand by 4.2% in 2023.

This will be a slight dip compared to last year’s growth of 4.7%, which is to be expected following the months of wrangling over the country’s debt restructuring. However, the Secretary was optimistic about the news, as GDP forecasts 4.8% and 4.7% growth in 2024 and 2025 respectively.

This is very welcome news. Zambia was the first major country to default on its $18 billion foreign debt during the Covid pandemic in 2020. The following years has seen issues with its creditors, who had for some time struggled to make headway with debt restructuring plans.

Zambia’s external debt is split roughly three ways: one third is owed to Chinese lenders, another to private creditors, and the rest to other governments and multilateral lenders, such the World Bank and International Monetary Fund (IMF).

Nkulukusa said central government external debt had increased by 1% to $14.09 billion as of end of this March from $13.96 billion at the end of 2022, making Zambian public debt a total of $25.4 billion.

He said in his announcement, “the increase in debt stock was largely on account of disbursements received from multilateral creditors for budget support and project loans”.

Photo: @CUTS_Lusaka / Twitter

President Hichilema to Speak at The Africa Debate, London

President Hakainde Hichilema is due to deliver a speech at The Africa Debate, London’s leading investment summit focused on Africa. The event – this year being its ninth iteration – will be held on 11 May at the Guildhall under the theme “Catalysing the Continent’s Trade Potential”.

Attendees at this year’s Africa Debate will span continents and industries. Among the guest list are representatives of investment firms, heads of global businesses, and policy and change makers from across the globe, including Africa, Europe, North America, and the Middle East.

The President is set to be the focus of the “Country Spotlight” event, where he will be interviewed about Zambia’s growing trade potential. Other events in the programme include interviews with Wamkele Mene, Secretary General of the African Continental Free Trade Area, and Samaila Zubairu, President and CEO of the Africa Finance Corporation, as well as speeches from British politicians Mark Simmonds and Andrew Mitchell.

Delegates at The Africa Debate, 2022. Photo: Fiona Hanson

There will also be various debates held throughout the day. A panel will discuss “Building a Comprehensive Digital Trade Strategy for Africa”, which will explore innovation in digital strategy and e-commerce across the continent. Other topics set to be explored through debates and panel discussions include: boosting the industrialisation of African countries; ESG regulatory initiatives in African trade; leveraging the continent’s critical minerals supply; and strengthening Africa’s finance sector.

The Africa Debate is organised and hosted by Invest Africa, the UK’s leading trade and investment platform for African markets. Invest Africa describes the continent’s trade outlook as “at a crossroads”. On the one hand, it is suffering from global supply chain disruptions following the Covid pandemic and the Russian invasion of Ukraine which “paint[s] a gloomy picture” of the future of Africa’s trade, as well as the threat of debt risks. But on the other hand, African trade and investment is aligning under the recently established African Continental Free Trade Area (AfCFTA), which aims to strengthen and protect it.

It is hoped that The Africa Debate in May will provide a forum for leaders in industry to discuss, and prepare for, the future of African trade. There is still time to register for a place at the summit.