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