Zambia Investor Briefing: July 2023
OVERVIEW
Zambia hosted it’s 57th International Trade Fair (ZITF) from 28 June to 4 July under the theme ‘Stimulating Economic Development Through Partnership, Trade and Investment’. The fair was attended by King Mswati III of Eswatini as its guest of honour, who called for closer trade collaboration between the two countries.
President Haikande Hichilema visited Ghana, where he signed nine Memoranda of Understanding (MoU) with President Akuffo-Ado on behalf of their respective countries. These MoU cover various industries, including trade and investments, tourism, arts and culture, science and technology, and skill development.
Zambia has signed two Memoranda of Understanding (MoU) with the United Arab Emirates. The first was signed by Minister of Mines, Paul Kabuswe, and concerns mineral resource exploration between the two countries. The second, regarding increasing support for Small and Medium Enterprises (SMEs), is worth US$15 million. The signing ceremony was presided over by President Hichilema and the UAE’s Minister of State for Foreign Affairs Sheik Shakboot Al Nahyan.
President of the African Development Bank (AfDB) Group, Dr Akinwumi Adesina, met with President Hichilema as part of his two-day official visit to Zambia. They discussed further support for the country in the aftermath of its successful $6.3 billion debt restructuring for bilateral creditors. The Bank has committed to several measures to assist Zambia in its economic recovery. These include an initial budget support of up to $150 million. Adesina told Hichilema, “Zambia is back. Zambia is bankable; and you, Mr President, you are bankable. You can count on the African Development Bank’s support all the way”.
Early July saw the announcement that a group of investors led by commodity trader Trafigura Group plans to invest up to $555 million in a railway project designed to link the Angolan port of Lobito to the Democratic Republic of Congo. The consortium is known as Lobito Atlantic Railways. The US has pledged to help finance the project according to its International Development Finance Corporation CEO Scott Nathan. Using the Caminho-de-Ferro de Benguela railway, the route will provide faster trade to Europe and the Americas from the DRC and Zambia.
On 12 July, President Hichilema participated in a virtual meeting for the Committee of African Heads of State and Government on Climate Change (CAHOSCO) on the Africa Climate Summit (ACS), cohosted by President William Ruto of Kenya and Mousa Faki Mahamat, Chairperson of the African Union Commission. Hichilema stressed Zambia’s commitment to the green investment agenda, describing private sector investment as a way of “implementing the continent’s transition towards a low-carbon development pathway”.
African Development Bank (AfDB) Group Visit to Zambia
President of the African Development Bank (AfDB) Group, Dr Akinwumi Adesina, met with President Hakainde Hichilema as part of his two-day official visit to Zambia. They discussed further support for the country in the aftermath of its successful $6.3 billion debt restructuring for bilateral creditors.
Adesina congratulated the Zambian government for reaching this agreement. He told Hichilema, “You have created a sense of hope in the country and confidence in the economy, paving the way for investments to return and accelerate the drive for prosperity for the country”.
The Bank has committed to several measures to assist Zambia in its economic recovery. These include an initial budget support of up to $150 million, and investment projects in key areas of the economy, including energy, agriculture, and transport. Also offered in assistance to Zambia are the services of the Africa Legal Support Facility (ALSF), which is able to offer aid in renegotiating the terms and conditions of external debt with private creditors.
Adesina told Hichilema, “Zambia is back. Zambia is bankable; and you, Mr President, you are bankable. You can count on the African Development Bank’s support all the way”.
Hichilema’s State Visit to Ghana
President Hichilema visited Ghana on a state visit earlier this month. There, he signed nine Memoranda of Understanding (MoU) with President Akuffo-Ado on behalf of their respective countries.
These MoU cover various industries, including trade and investments, tourism, arts and culture, science and technology, and skill development. Significant among them was the MoU signed between the Zambia Chambers of Commerce and Industry (ZACCI) and the Ghana National Chamber of Commerce and Industry (GNCCI) to strengthen trade and investment cooperation.
Other MoU were concerned with matters such as the preventing the trafficking, supply, and consumption of illegal drugs, and one was dedicated to fostering collaboration in the exploration and exploitation of hydrocarbon resources.
Also on Hichilema’s itinerary was a State Banquet hosted by Ghana’s President and a visit to Valley View University of Ghana, where the Zambian President was awarded an honorary degree of Doctor of Human Letters.
Digging Deeper
Production started this month at First Quantum Minerals’ (FQM) Enterprise mine in North- Western Province – the largest nickel mine in Africa. It follows an investment of $100 million by FQM last year to bring the project online. The mine is expected to produce 32,000 tons of nickel over the next two years, making Zambia the largest producer of nickel for electric vehicles on the continent.
This comes amidst a busy month for mining in Zambia, with the government due to announce a new core investor for Mopani Copper Mines imminently. China’s Zijin Mining and Norinco Group, as well as South Africa’s Sibanye Stillwater are all in the running. Getting Mopani running at full capacity is a cornerstone of President Hichilema’s ambition to increase Zambia’s copper production to 3 million tonnes by the end of 2032.
Elsewhere, Barrick President and Chief Executive Mark Bristow has said the true potential of the company’s Lumwana copper mine is only now being revealed. Additional expansion opportunities, identified through an updated geological survey, are currently being assessed anddrilling at the Kababisa project highlights potential flexibility through higher grades. Lumwana is currently on track to achieve 2023 production guidance as the operation ramps up, the Malundwe pit is reopened, and the facility transitions to owner miner operations.