Zambia Is Back: Unlocking Zambian Potential In 2023
In 2022, the New Dawn government set out to release supply bottlenecks, remove unnecessary red tape and create an economic environment that nurtures investment and businesses. Following the 2023 budget, it is clear that the upcoming year is going to be monumental for Zambia’s economic recovery, with the rate of GDP growth forecast to increase by nearly 4% and a debt restructuring agreement firmly on the horizon. It has never been a better time to invest in Zambia.
As we look to 2023 one thing is for sure, Zambia’s economy will continue to thrive; blossoming into a new investment hub for Africa. Following years of economic instability and financial hardship, key economic indicators are now painting a positive picture. According to Bloomberg, in December, inflation fell to below 10% for the first time in almost three years and that rate is expected to average out at 8.5% in 2023. This fall in inflation shows that Zambia is not just welcoming investors but has an economy that can support them. Stable and low inflation reduces uncertainty and price distortions creating an environment to nurture investments, ensuring ample returns to businesses. This was highlighted in February last year when S&P Global Ratings improved the country’s credit rating. As a result, the Zambian economy continues to be one of the most economically stable investment environments in southern Africa, instilling confidence in investors around the world.
Outside of these top-level indicators, 2022 was an immensely successful year for foreign investments in key sectors of Zambia’s economy, such as agriculture, mining and tourism. In December, for example, the Radisson Blu hotel group opened a new resort on the banks of the Zambezi – the group’s first ever safari resort in Africa. The new resort will boast luxury rooms which include panoramic views across the Zambezi river.
Radisson Blu Resort Mosi-oa-Tunya — Photo by Radisson Hotel Group
Elsewhere, PHYLA Earth, who use genetically modified seeds to improve crop yield, announced that they will be developing a remarkable orchard in Chingola to combat soil erosion. The programme will see 4,000 Pongamia seedlings be planted near the Konkola Copper Mine. These are expected, once they have grown, flowered and produced seeds, to improve soil fertility in the area. This in turn will support local farming and increase ecological resilience, something that in the face of a climate crisis is of more importance than ever.
Moreover, Zambian Breweries, owned by the multinational giant AB InBev, announced they would be investing $80 million in capital investments to expand their Lusaka factory and create 5,000 jobs. The investment will also target more sustainable means of production, with 90% of the funds dedicated to innovating high-tech equipment to make operations more environmentally friendly. This includes the enlargement of the company’s agriculture out-grower schemes to offer more procurement opportunities to local suppliers.
Zambian Breweries Staff at the Lusaka brewery plant
Perhaps the pinnacle for investments in 2022 was achieved during the US-Africa Leaders’ Summit, when KoBold Metals announced their $150 million pledge to develop the Mingomba copper-cobalt mine. The new project uses cutting-edge AI technology to find new metal deposits; edging Zambia even closer to its copper production target of 3 million tonnes by 2032.
President and Founder of KoBold, Josh Goldman, said that he chose to invest in Zambia due to its economic stability and pro-business policies. He said that Zambia is a “safe and peaceful place where we can hire exceptional people, where the laws support investing for the long term, where we can operate in ways that protect the environment and support local communities and where government supports our investment with actions that are fair, transparent and fast.”
The investment hopes to break into the estimated 247 million tonnes of ore with some of the highest grade of copper found throughout the world. The quality of copper will be vital in providing batteries which can be used in renewable energy and electric vehicles. It is estimated that the global copper industry will need $100 billion worth of investment to meet its current demand by 2030. This presents a key opportunity for Zambia to enable mining profits as well as power inclusive growth.
These investments as a whole will have a multitude of positive multiplier effects on almost all aspects of Zambia economy, leading to more benefits to Zambians. Through the New Dawn government’s reformed tax system, the more companies that invest into Zambia the more revenue that can be collected. As this increases more government spending can be allocated towards infrastructure such as roads, healthcare and schools.
Outside of increased government revenue, high levels of international and domestic investment will see business capacity increase, resulting in higher employment opportunities, arming Zambians throughout the country with high-quality working prospects.
The US-Africa Leaders’ Summit also represented a pivotal moment for African leaders to meet and discuss global issues. Speaking about the KoBold investment, President Hakainde Hichilema made it clear that international cooperation is key as the world faces a myriad of uncertainties. “This investment today is not [just] about Kobold and ZCCM, it’s not about Zambia,” he said. “It’s about all these and the rest of the world as we grapple with climate change issues, as we grapple with replacing climate damaging fuels with green fuels, and therefore electric vehicles, very, very important to us.”
President Hakainde Hichilema, pictured at the summit alongside U.S. Secretary of State Anthony Blinken
Looking ahead to 2023, the World Economic Forum meets in Davos this week, presenting Zambia with another opportunity to market itself on the world stage. The event will host over 2,700 leaders from government, business and civil society, meeting to discuss topics, ranging from agriculture to the conflict in Ukraine, to digital infrastructure.
Zambia will be represented by Finance Minister Situmbeko Musokotwane, who will be looking to advance relationships with international partners, as well as representatives from the private sector to further boost sustainable investment into Zambia and advance our country’s reputation as a premier location to do business on the African continent. Last week, the World Economic Forum published an article outlining that even in the face of global economic uncertainty more businesses than ever are looking to emerging economies, such as Zambia, to meet their ambitious business plans. This is exactly why Zambia should be putting itself in front and centre to welcome more foreign investments, leading to tangible benefits for Zambians throughout the country.
Promoting investment is key to the work we do at Zambia Is Back. We work alongside the New Dawn government and the Zambia Development Agency to connect Zambian businesses with investors from around the world to make it easier than ever to do business in Zambia.
Now is the time to invest in our nation and we are excited to meet with more businesses to unlock Zambia’s potential. This year marks a new chapter in Zambia’s history and we are looking forward to seeing what is in store for businesses over the next few months and helping to coordinate investments that promote all aspects of our economy and its communities.
Yellen visits Zambian farm to showcase Africa’s agricultural potential
CHONGWE, Zambia (AP) — U.S. Treasury Secretary Janet Yellen traveled from a small farm on a rural red clay road to a ramen noodle manufacturing plant in Zambia’s bustling capitol of Lusaka on Tuesday to showcase Africa’s potential to help solve the world’s problems with food shortages.
Yellen, midway through a 10-day tour of Africa, devoted her day to highlighting the agricultural investment potential of underdeveloped African nations, especially as Russia’s invasion of Ukraine has exacerbated worldwide hunger and the cost of food.
“As we tackle acute needs now, we must also take a longer view and scale up investment in long-term food system resilience. Africa is a perfect example of these dual challenges,” Yellen said in Chongwe, a village an hour outside of Lusaka. She stood at her signature podium, surrounded by lush green fields of corn and with chickens grazing nearby.
Secretary Yellen speaking to farmers in Chongwe.
The continent’s potential is evident in one statistic: Africa has 60 percent of the world’s uncultivated arable land.
“We want to advance a future where Africa participates more fully in global food and fertilizer markets and supply chains,” Yellen said as farmers, mostly women wearing brightly colored wax cloth dresses, stood and listened.
They told Yellen stories of how they’ve sustained their communities — by sharing goats to mate to build a sustainable livestock supply and by developing collective savings groups and silos for grain.
Echinah Mfula, a Chongwe farmer and participant in the Twalumbu Savings Group, which helps its members pool money to buy livestock and food, said, “It’s been a challenge. It’s been a big challenge for us, but we are successful.”
In Zambia, roughly 2 million people face acute food insecurity, more than half the population lives below the poverty line and nearly half of the population is unable to meet minimum caloric intake needs.
“It is a continent that faces acute food needs,” Yellen said. “But it is one that also has the potential not only to feed itself but also to help feed the world — if the right steps are taken.”
Solving the country’s well-documented debt crisis is more important than ever if financing for new agricultural projects is to be possible.
Zambia became Africa’s first coronavirus pandemic-era sovereign nation to default when it failed to make a $42.5 million bond payment in November 2020. Negotiations over how to deal with the debt load have been ongoing.
Experts say a prolonged debt crisis could permanently prevent countries like Zambia from recovering, leading to an entire nation sliding deeper into poverty and joblessness.
Food insecurity is increasing around the globe, due to COVID-19, Russia’s invasion of Ukraine, and rising food costs, according to a report released Tuesday by the U.N. Food and Agricultural Organization and other United Nations agencies. Nearly a half-billion people were undernourished in 2021 and more than 1 billion faced moderate to severe food insecurity, the report said.
On top of that, the costs of fertilizer and natural gas have exploded and global prices for food commodities like grain and vegetable oils were the highest on record in 2022.
Russia’s invasion of Ukraine last February worsened the food insecurity crisis because the two countries were leading suppliers of wheat, barley, sunflower oil and other products, especially to nations in parts of Africa, the Middle East and Asia that were already struggling with hunger.
In the U.S., the Treasury Department issued a carve-out to the thousands of sanctions that have been imposed on Russia, to allow agricultural transactions and trade related to humanitarian aid and access to communications. The hope is to prevent some of the most damaging impacts of the war on vulnerable populations.
But in Zambia, Yellen said she sees solutions in home-grown firms like Java Foods Limited, a woman-owned company that produces low-cost, nutritionally fortified instant noodles. It targets low-income urban consumers and sources 100% of its wheat from Zambian farmers.
Yellen visits a female-savings co-op.
Monica Musonda, Java Foods’ founder, told Yellen at a roundtable Tuesday that staying afloat has been difficult, since her firm is one of the only food manufacturers in Lusaka. “But we are trying to make an impact in our community — you can see what we women can do.”
Java has worked under USAID’s Feed the Future program and with the US Partnership for Food Solutions, a non-profit founded by General Mills.
Yellen began her tour of Africa in Senegal and moves on to South Africa after Zambia.
This article originally appeared on AP News.
U.S. Treasury Secretary’s Visit Highlights Mylan Labs Success
U.S. Treasury Secretary Janet Yellen’s upcoming visit to African nations will include a tour of the Lusaka distribution centre of Mylan Labs: a company at the forefront of Africa’s fight against disease and a model for international investment in Zambia.
Accompanying Secretary Yellen on the tour will be President Joe Biden, Vice-President Kamala Harris, Trade Representative Katherine Tai, Commerce Secretary Gina Raimondo and Yellen’s deputy Wally Adeyemo. Such a senior entourage for the Biden administration’s first extended visit to Africa demonstrates the importance of the trip and its goals.
The trip follows the U.S.-Africa Leaders Summit of December 2022. Biden informed African leaders from 49 countries and the African Union of America’s belief in a strong U.S.-African partnership for the future, saying at the three-day summit in Washington that “The United States is ‘all in’ on Africa’s future”. Finalised at the summit was a $15 billion two-way package of trade and investment deals, signifying a strong future for Zambia and the African continent more widely.
One of the success stories of U.S. private investment in Africa, Mylan Labs exemplifies the potential of the new slew of deals being agreed between the U.S. and Africa in an attempt to offer African leaders investment choices more sustainable than those presented by China.
Mylan Labs is a U.S.-based pharmaceuticals brand, whose African branch specialises in affordable anti-malarial and anti-retroviral medication to aid the fight against malaria and HIV. Located at the Lusaka South Multi Facility Economic Zone, the distribution centre was launched in September 2018 and employs 75 Zambian healthcare workers.
The centre was established with the goal of making medicine more easily accessible to Zambians in need. Mylan is the world’s largest supplier of HIV and AIDS treatments, and then-Minister of Health Chilufya announced that 86% of those in Zambia living with HIV had been put onto a treatment plan after the site’s launch.
The U.S. Department of the Treasury stated on their website that Secretary Yellen would “tour the facility and highlight U.S.-Africa joint efforts to promote a healthy population, improve global health security, and collaborate to prevent and prepare for future pandemics”.
A renewed U.S. desire for improved economic and diplomatic ties with African nations comes at an opportune time for Zambia, whose finance minister is exploring financial alternatives to Chinese lending. In September 2022, Zambia announced it would totally cancel 12 projects – half of which would be financed by China EXIM Bank, and another two by ICBC and Jiangxi Corporation, totalling overall to roughly $1.4 billion.
The $1.3 billion zero-interest loan secured in August 2022 from the UN’s financial agency, the International Monetary Fund, seeks to push general economic growth through recurrent spending as an alternative to the infrastructure-focused projects funded by Chinese investors.
The IMF has projected a global average of 2.7% economic growth for 2023; for Africa, meanwhile, it has forecasted a mean growth rate of 3.7%. The arrival of new American investment opportunities, Zambian economists hope, will capitalise on and drive this anticipated economic boom in the next phase of Zambia’s recovery and growth in the post-COVID-19 era.
Janet Yellen to visit African countries as US steps up overtures to continent
Washington is seeking to entice nations away from financial and resource ties to China
US Treasury secretary Janet Yellen this week begins a 10-day tour of three African democracies, as President Joe Biden’s administration steps up overtures to a continent where both China and Russia have made inroads.
Yellen will during her trip seek to flesh out a new US agenda to entice countries away from financial and resource ties to China, the continent’s biggest creditor, and persuade them to take a more robust line against Russia’s invasion of Ukraine.
The former Federal Reserve chair will visit Senegal, Zambia and South Africa, countries where the US has been touting investments in infrastructure, metals for electric vehicle batteries and renewable power. She is also expected to discuss rising debt levels in Africa after several defaults and the prospect of more as interest rates rise in the US and elsewhere.
“There’s a coming storm,” said Aubrey Hruby, cofounder of the Africa Expert Network in Washington. “A lot of what was borrowed in eurobonds is going to come due.”
Biden’s administration has stepped up engagement, hosting more than 40 leaders at a US-Africa summit in December in Washington, the first in eight years. The US made investment pledges worth $55bn over three years and backed the idea of the African Union joining the G20 permanently.
Last year, the US issued a new African strategy, which de-emphasised competition with China and Russia, but which made clear that Washington was seeking to make up for lost ground
By 2050, one in four people will be African and at least a third of minerals required for the green transition lie under its soil. Yet Barack Obama’s administration struggled to keep up engagement with the continent while Donald Trump did not attach great diplomatic importance to Africa.
The Biden administration is taking a different approach. “We believe Africa’s growth will be a key driver of global growth over the coming decades. As its population grows, it is essential that economies of African countries generate high-quality jobs at the needed pace. It’s in the US interest to be a partner in this growth,” a senior US Treasury official told reporters ahead of the trip.
Yellen is the first of several senior US officials expected to visit this year, including Biden and vice-president Kamala Harris. “It’s run-of-the-mill regular engagement and that’s what we were missing,” said Hruby.
The US is seeking to emphasise private sector activity as an alternative to Chinese state-backed loans that many indebted African nations can no longer afford.
Yellen’s trip “will highlight the Biden-Harris administration’s work to deepen US-Africa economic ties, including by expanding trade and investment flows,” the US Treasury said.
It also said that Yellen would “underscore the spillover effects of Russia’s illegal war in Ukraine, which have disproportionately hurt developing countries”. She would note the US provision of $13.5bn in food assistance, it said.
Yellen will meet President Hakainde Hichilema of Zambia, which is struggling to make progress on a restructuring of defaulted debts, many owed to Beijing.
Zambia, which defaulted more than two years ago, is meant to set a precedent for Beijing to work with other creditors on debt restructuring after a surge in lending by Chinese state banks to Africa in recent years.
But Zambia’s Chinese creditors are yet to agree debt relief terms, even though a bailout from the IMF hangs on the outcome. Yellen said last year that in Zambia’s case and that of other defaulting frontier economies, “the barrier to making greater progress is one important creditor country, namely China”.
In South Africa, Yellen will visit the coal-producing region of Mpumalanga to emphasise US support for a “just transition” to renewable energy. The US is contributing to an international package worth more than $8.5bn to accelerate the transition, which is contentious in South Africa, while seeking to soften the blow on coal-dependent communities through training and alternative industries.
Yellen’s visit comes soon after the traditional new year’s African tour by Qin Gang, China’s foreign minister, the 33rd year that the continent has been the foreign minister’s first port of call.
This originally appeared in the Financial Times
Photo: Saul Leob/AFP/Getty Images
USAID Partnership Transforming Zambia Into Africa’s Breadbasket
According to research undertaken by the United States Agency for International Development (USAID), 80 percent of smallholder farms in Zambia produce maize. Many of these smallholder farms are in isolated, hard-to-reach areas, making it difficult to transport their harvests, which, on an individual scale, are small, but collectively offer huge opportunity for the Zambian economy and nutritional wellbeing across East and Southern Africa.
In bumper years, such as the 2021/22 record maize harvest in Zambia, enormous volumes of excess maize have been produced overall by smallholder farms, leading to as many as 1.5 million metric tons of surplus corn being available for export. In spite of this, issues around storage and transport have led to maize contributing to 30% of Zambia’s total post-harvest losses.
The struggle to convert surplus maize into income for regional smallholder farms and the broader Zambian agricultural economy, however, is set to undergo extraordinary transformation in the immediate future.
In December 2022, USAID announced via the Prosper Africa Initiative that it would be joining a multi-pronged collaboration whose aim was to address the global food security crisis in the wake of the war in Ukraine and its impacts on food supply chains. Heading this joint effort would be: Africa-Global Schaffer, an agribusiness and energy firm; bechtel.org, the social impact branch of infrastructure firm Bechtel; and Empowering Farmers Foundation, the social impact arm of South Africa-based firm Export Trading Group.
This new partnership was unveiled at the US-Africa Leaders Summit 2022 held in Washington, D.C., from December 13th to December 15th, with its primary focus being to “promote shared prosperity by increasing the supply and quality of maize on the African continent”. USAID pledged to match its private sector partners’ investments in African food security 1:1. The first phase of the program will build Smart Integrated District Aggregation Centres (SIDAC) in areas where improving harvests will have the greatest impact on local economies and, more broadly, the East African trade routes to connect sellers of high-quality maize with buyers.
For Zambia, this will mean seven centres opening by the May harvest season of 2023, scaling up to twenty-three centres in the near future. The effects of such investment and improvements to infrastructure will be colossal: initially, around 100,000 metric tons of maize and other grains that would otherwise go to waste will be stored and sold each growing season.
Not only will this have transformative financial implications for farmers, but it will address grain price spikes in the region, mitigate food shortages, and prevent as many as 800 metric tons of carbon from going to waste - the equivalent of more than 80,000 gallons of diesel.
The potential of homegrown maize has become the cause of greater interest since the onset of fertiliser and food shortages triggered by the war in Ukraine. Speaking of the expectations of their union with USAID and Prosper Africa, Stu Jones, Bechtel’s Corporate Relations Manager, said, “our efforts will save lives, improve the future of the continent, and ensure sustainable outcomes”. Speaking with the Zambia News and Information Services, Julie Mellin, USAID Acting Public Affairs Officer, said that the partnership would help promote shared prosperity by increasing the supply and quality of maize on the African continent.
New supply chains enabled by the SIDAC programme will meet immediate demand, if the trends of 2022 repeat for the 2023 harvest. Faced with food shortages following the 2022 droughts, East African nations requested over 500,000 metric tons of maize, whilst regional neighbours, including Malawi, Angola, DRC, Mozambique and Namibia, requested an additional 800,000 metric tons, according to then-Agriculture Minister Reuben Mtolo in an interview with Farmers Review Africa. The 2022 maize harvest in Zambia, he added, created carryover stocks of surplus grain of 1.5 metric tons, thanks to the Food Reserve Agency’s efforts. The SIDAC programme will build on the Food Reserve Agency’s model to further reduce food waste.
European Union (EU) funding has already accelerated sustainable farming projects in Zambia, under the Sustainable Intensification of Smallholder Farming Systems in Zambia (SIFAZ) project. Established in 2018, SIFAZ was the result of a partnership between the UN’s Food and Agriculture Organisation (FAO), Zambia’s Ministry of Agriculture (MoA) and the International Maize and Wheat Improvement Centre (CIMMYT), and has begun to research agricultural methods for smallholder farms that were initially conceived by Feed the Future’s ‘Africa Research in Sustainable Development for the Next Generation’ (Africa RISING). By September 2022, a SIFAZ vision for sustainable maize yields had been approved by Zambia’s National Advisory Committee for the Approval of Candidate Technologies or Agronomic Practices.
The programme offered 3 agricultural formats that would grant farmers better yields while nurturing their soil – two involving incorporating grain legumes into maize fields to improve soil nitrogen content and pest management, and the third advising maize be grown on raised soil beds to improve soil oxygenation in flood-prone tracts of land. All three principles raised awareness among the Zambian farmer community of the importance of conservation agricultural approaches, namely minimal soil disturbance, soil enrichment through crop residue, and greater crop diversity.
Christian Thierfelder, a CIMMYT principal cropping systems agronomist based in southern Africa, explained the importance of these new agricultural principles to SIFAZ: “The official clearing of these transformative cropping technologies is a huge milestone for the project and for Zambia’s resource-poor farmers”. Working closely with the MoA and FAO, he added, CIMMYT was “planning research trials, demonstrations and promotion to reach 20,000 farmers as a first step”.
The significance of programmes like SIFAZ is difficult to overstate: approximately 300 million smallholder farmers grow maize in Sub-Saharan Africa, relying only on their soil and the seasonal rains. Per the Consultative Group on International Agricultural Research (CGIAR), maize covers up to 75% of cropland in East and Southern Africa and the Global Yield Gap Atlas (GYGA) estimates that the agricultural sector in Zambia supports livelihoods of 85% of the population. The recent announcement in November 2022, therefore, that the EU would grant SIFAZ an additional EU€20 million in funding demonstrates the globally understood importance of African maize sustainability programmes, and of the SIFAZ project in particular.
Comparative maize prices in 2022 illustrate the relevance of SIDAC’s goal of transporting surplus Zambian corn to neighbouring countries with unfulfilled demand. According to research undertaken by the American Journal of Agricultural and Biological Science, via The Conversation, market prices in Zambia were significantly below those of neighbouring nations. At the July peak, prices in Nairobi, Kenya, and Kampala, Uganda, rose above US$500/MT. Average prices in Zambia, meanwhile, were US$220/MT.
Per research conducted in the American Journal, the discrepancy of US$300/MT was double the maximum transport costs to Uganda or Kenya might have been, justifying the need for the infrastructure to export Zambian grain, connect outstanding demand with surplus supply and limit price spikes in the local region. Recent surge in demand for soybeans drove prices in East Africa above US$1000/MT; meanwhile, Zambian soybeans, enjoying a bumper harvest, were achieving a price of US$439/MT. SIDAC’s storage, and SIFAZ’s education, will create a platform to assist Zambian smallholding farmers to capitalise on market windfalls.
The future is bright, with strong funding, thorough research and new infrastructure creating a framework to combat regional food shortages, drive the Zambian agricultural economy, and, above all, empower smallholder farms to maximise their prospects.
British Firms To Invest US$2 BILLION In Zambia’s Energy Sector
ZNBC, Arnold Tutu, January 11, 2023
Seven companies from the United Kingdom are investing TWO Billion dollars in setting up renewable energy projects in Zambia projected to produce two thousand Megawatts of electricity.
British High Commissioner to Zambia NICHOLAS WOOLLEY says the British companies are currently conducting feasibility studies and applying for regulatory approvals before they can kick start their projects.
Mr. WOOLLEY has told ZNBC News in an interview that the companies want to set up solar and wind energy projects in various parts of the country which will produce power to be sold to ZESCO.
The British envoy says the two thousand megawatts will be ready to be added to the national grid in the next two to five years.
And Head of Economic Development and Green Growth at the British High Commission in Zambia SARAH BLOOM says a lot of regulatory reforms are needed in the country’s energy sector for it to attract more investment.
Ms. BLOOM says tariffs need to be attractive and that ZESCO should be in a good financial situation for it to be buying power from independent producers.
And Special Assistant to the President for Finance and Investment JITO KAYUMBA says President HAKAINDE HICHILEMA is committed to reforming the energy sector to make it more attractive to investors.
Mr. KAYUMBA says government is working towards attracting more investments in the sector to achieve energy surplus in the coming five years.
He says the current energy crisis has highlighted the urgent need to increase the amount of energy the country produces to surpass the demand.
The seven British firms which are about to invest in Zambia are Hive Green, Western Power, Buffalo Energy, Africa GreenCo, First Quantum Minerals Solar Energy, Vitalite Solar and SolarAid.
Thinking of investing in Zambia’s future? Sign up for our investor briefing or get in touch at info@zambiaisback.com
Zambia’s Role in the Green Energy Transition
Zambia is well positioned to provide the world with the minerals it needs to transition to renewable energy.
With its significant reserves of copper and cobalt, metals that are fundamental to the transition away from fossil fuel reliance, it has the potential to provide global supply chains with crucial components for years to come.
These minerals are used not only in wind and solar powered technology, but are also fundamental to the production of batteries used in electric vehicle production.
Transitioning to electric vehicles and increased energy supply via renewable sources is fundamental to the shared global commitment to keep global warming below 1.5 degrees. In the words of the United Nation’s Net Zero Coalition “replacing polluting coal, gas and oil-fired power with energy from renewable sources, such as wind or solar, would dramatically reduce carbon emissions.”
Consequently, according to the International Energy Agency, Copper demand is expected to three times its current level by 2040, while cobalt demand is expected to rise more than twenty times.
Zambia accounts for 6% of the world’s copper reserves. It produces 850,000 tonnes of copper annually, making it the world’s 7th largest producer but with government focus and foreign investment this is expected to rise significantly.
Canadian firm First Quantum Minerals (FQM) have committed to a $1.25 billion dollar investment into the Kansanshi copper mine as a reflection of their “renewed confidence” in Zambia’s investment climate. The investment is designed to expand the mine and seize the opportunity rising international demand presents.
President Hichilema is keen to see Zambia meet the global rising demand in order to spur economic growth. A key part of the UPND’s growth strategy, designed to steer the country into a period of middle income prosperity following the instability of the Lungu years, is the commitment to increase copper production more than three times over.
By 2030, it is hoped Zambia will produce 3 million tonnes of copper a year – that represents an impressive 352% increase in production on a commodity that already accounts for 80% of the country’s export earnings.
Copper is critical for solar PV, wind, hydro, electric vehicles and national electricity grids, there are few metals more fundamental to a green transition. Zambia is placed in an extraordinary position to spur its own economic take-off and to foster a status as a crucial player in the fight against climate change.
This is why during December’s US Africa leaders’ summit, held in Washington, D.C. leaders from Zambia, the Democratic Republic of Congo, and the US signed a memorandum of understanding to develop an electric vehicles battery chain.
It is also why US-based firm KoBold Metals have announced a $150 million development into the Mingomba copper-cobalt mine in the country. The Bill Gates backed startup aims to use artificial intelligence to create a map of the Earth’s crust, identifying areas with the highest concentration of cobalt and copper deposits in order to locate minerals overlooked by traditional exploration as the earth’s most accessible minerals have increasingly already been mined. The company’s CEO is absolute: he does not see KoBold as a mining operator but a leader in the “electric vehicle revolution.”
Because copper is a highly efficient conductor, it is used in electric cabling and its efficiency reduces wastage. It is also one of few materials that can be used again and again without a loss in performance. Copper plays an important role in making energy production as efficient as possible with minimal impact on the environment.
Traditionally, Zambian government have sought to extract the greatest possible tax value from the mining industry. However, the New Dawn government have reduced the tax payable on new mines in order to encourage further exploration, induce investment, and create the greatest possible economic gain for the entire Zambian economy, not just the government’s coffers.
In this new climate, mining giant Barrick Gold has recently announced record yields from its Lumwana copper mine. Crucially for Zambia’s future, the company’s presence in the country has benefits beyond corporate and treasury income. Barrick Gold employ more than 4,000 people in the country, 99.3% of those are Zambian nations benefitting from the firm’s employment. It has been estimated that when royalties, taxes and local employment are combined, the firm have contributed $8.2 billion to the country’s economy.
In the past, Zambia has not taken full advantage during copper booms. From 2003 to 2006 the price of copper tripled, Zambia’s economic growth rate also grew, but poverty and income inequality remained unaffected.
Without integrating the benefits of foreign investment into the broader economy, Zambia could once again fail to capitalise on the opportunities presented by its extraordinary natural resources. By encouraging foreign firms to employ Zambia workers in the mine, in catering, housing, security, and to executive positions within local structures.
As optimism grows that Zambia can play a leading role in a transformed world, there is hope that President Hichilema can create meaningful change for Zambians.
A Room With a View: Radisson Blu Open Resort on the Zambezi
World-renowned hotel business, Radisson Hotel Group, has brought its brand of luxury tourism to Africa. Their newly announced resort in Zambia will serve as the flagship for the company’s long-term expansion on the continent.
The opening of their first African safari destination marks a key step towards the company’s goal of opening 150 hotels in Africa this decade. They wish to have opened or have under construction at least 150 African hotels by 2025.
Just one mile south of Livingstone, the Radisson Blue Mosi-oa-Tunya is well connected to transport links whilst only being two and a half miles from the glorious sights of Victoria Falls – of the Seven Natural Wonders of the World.
The glorious Victoria Falls is just a few miles away
The beautiful UNESCO World Heritage Site is one of Zambia’s greatest attractions. Remarkably, the falls are the world’s largest sheet of falling water and are almost double the height of the famous Niagara falls and half a kilometre wider. With the resort located on the Zambezi river, tourists can see the awe-inspiring falls and enjoy beautiful vistas whilst being surrounded by unique ecological diversity.
Tourists can now visit the hotel and its wonderful surroundings with ease. Zambia is a safe, beautiful, and increasingly prosperous destination for foreign tourists. Visitors from the EU, UK, USA, and China no longer have to worry about troublesome visa fees either since President Hichilema’s government removed such barriers to entry in November of last year.
The environment is a fundamental part of Zambia’s beauty, diversity and history. Environmentally conscious travellers can rest assured they are making a responsible choice staying at Radisson’s new resort. The resort has signed the UNESCO Sustainable Tourism Pledge, as part of Radisson’s global “Responsible Business” program and it has earnt EDGE green building certification. The certification reflects an impressive 20% increase in energy efficiency, water reduction and use of sustainable materials when compared to similar local properties.
The incredible views available at Mosi-oa-Tinya
The Mosi-oa-Tinya resort has 200 top-class rooms, suites and villas including some with panoramic views across the Zambezi river. The resort also offers a range of facilities including a gym, a bar, and a swimming pool. If you get hungry they boast six restaurants some inspired by local African cuisine while others set to serve a more European taste. If you’re thirsty there are a number of bars including the Mopani Bar and Lounge. And if you need to catch up on some work Radisson also offers boardrooms and meeting rooms. You can also host an event for up to 250 people in their impressive ballroom.
There are a number of activities throughout the national park including helicopter rides over the falls, rafting, canoeing and game drives. You may also catch a glimpse of the rare White Rhino or the more common elephants, giraffes, hippos and bird species that surround the hotel.
The Lower Zambezi National Park is a haven of African wildlife that has seen an impressive regeneration in recent decades following crucial reductions in the levels of illegal poaching.
The World Bank recently announced they would be investing $100 million to boost tourism in Zambia. For a country of such natural beauty, it remains an underutilised path to prosperity. Indeed, tourism minister Rodney Sikumba has described himself as “extending an olive branch” to potential investors as he seeks to continue his program of communications and infrastructural improvements in order to create as smooth and relaxing a tourist experience as possible. President Hichilema, too, has called for greater regional integration of east and southern African tourist routes in order to better showcase the beauty and cultural diversity of the region.
The entrance of Radisson Blu to Zambia represents a significant step. With over 75 years of hospitality experience, 1,100 hotels, and billions of dollars of revenue Radisson will bring world-class hospitality to the Zambezi.
Shaun Wheeler, General Manager of Radisson Blu Mosi-oa-Tunya Livingstone Resort, Zambia, expressed his excitement at the company’s expansion in Zambia. “I am thrilled to lead the team as we open this magnificent property which allows us to offer visitors memorable moments and exciting experiences such as discovering one of the Seven Wonders of the world (The Victoria Falls), which is a short distance from the hotel”.
Having already established a hotel in Zambia, the company are doubling down on their faith in the country’s prospects and attractiveness to foreign tourists. Mr. Wheeler continued “Radisson Blu Mosi-oa-Tunya Livingstone Resort, Zambia represents a unique destination for our guests to discover and explore,” says Tim Cordon, Chief Commercial Officer, Middle East & Africa, Radisson Hotel Group. “The expansion of our presence in Zambia demonstrates our belief in the country’s potential. This hotel is our second property in Zambia, following the opening of Radisson Blu Hotel, Lusaka, with a third hotel, Park Inn by Radisson Lusaka, Longacres, due to open in 2023.”
With visa fees out the way and world-class providers like Radisson placing their faith in the country, is it time you invested in the future of Zambia?
Thinking of investing in Zambia’s tourism industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com
Thinking of visiting? Why not explore zambiatourism.com for more information.
PE-Backed Firm Helps Zambia Become Africa’s Top Stock Performer
Bloomberg, January 3, 2023
Copperbelt accounted for majority of the Zambian index’s gains
Lusaka’s benchmark index has jumped 12% in dollar terms
A rally in Copperbelt Energy Corp. helped Zambia’s benchmark stock index become Africa’s best performer this year.
The 22-member Lusaka Securities Exchange All Share Index climbed almost 12% in dollar terms in 2022, its second straight year of gains. Copperbelt, which supplies power to mining companies in Africa’s second-biggest copper producer, contributed most to the index’s advance.
Local investors piled into the power supplier’s stock after the government of President Hakainde Hichilema, who was elected in August last year, helped resolve a dispute the company had with the previous administration. The gains in the company’s shares may continue next year, according to Charles Mate, founder of Stockbrokers Zambia Ltd.
“What we have seen really is a resurgence in terms of investor interest, especially from the domestic market,” Mate said. “This stock still has significant upside.”
Lusaka Securities Exchange performance since January 2020, via https://luse.co.zm/
Copperbelt, which is more than a third owned by private equity firm Affirma Capital Singapore Pte, since 2020 was locked in legal wrangle with the government. The disagreement began dissipating in January.
With a trailing price-to-earnings ratio of about five times, Copperbelt Energy is still undervalued, said Mate, who helped set up the local stock exchange in 1994 and was its first general manager.
By Matthew Hill
Buya Bamba: Bringing Food Security to Zambia
Zambia has started exporting fresh potatoes and frozen French fries to South Africa and Namibia.
The export is taking place through Shoprite, one of the continent's largest retail supermarkets.
Local Shoprite and Hungry Lion outlets in Zambia have concurrently stopped importing potatoes from South Africa because Buya Bamba can meet the quality and demand requirements locally.
Until recently, Zambia would import millions of dollars’ worth of frozen potatoes from foreign markets including South Africa. Domestic production, it is hoped, will reduce the costs for Zambian purchasers whilst also leading to Forex savings for the Zambian economy.
In 2021 the firm completed the construction of a $7 million dollar factory for the production of commercial frozen chips. It is the only one of its kind in Zambia, and it is hoped it can make Zambia a net exporter.
Buya Bamba has been in operation since 1999, initially created by Anthony Barker and Juri van Zyl to connect potato farmers with the restaurants and retail outlets that needed their produce. They’re now a major and essential contributor to Zambian agriculture. Their seeds are chosen with care to ensure sustainability and high yields for the Zambian ecosystem and economy.
As well as the farming of potatoes, Buya Bamba also run an impressive logistics organisation to help get Zambian potatoes into supermarkets across southern Africa.
President Hichilema is keen to support the growth of small-holder farming in Zambia. Indeed, promised in the 2023 budget are 256 additional extension support officers and 69% budgetary increase for the Comprehensive Agricultural Support Plan. The plan now boasts a budget of K9.1 billion.
Managing Director, Anthony Barker, believes the company’s greatest strength is providing small farmers with access to the market. “We let every single consumer, including takeaways, restaurants, corporate restaurants, supermarkets, and the end-user access potatoes from the small farmers,” he commented.
Barker told Business Focus that he is optimistic about the Zambian market going forward. “[I] believe that there’s going to be more stability in times to come, and I think the future looks bright for Zambia at this point. We’ve invested in that future as a company,” he said.
“The people in Zambia are amazing,” Barker insists. “They’re really a very hard-working culture, and I’m very proud to work with them. I am Zambian myself and I am very proud to work with the Zambian people. We are providing options for people to buy and sell potatoes, providing for all walks of life. I love Zambia and will continue to invest here- this is my home.”
The company also hold significant amounts of potato seed in cold storage. Potato seedlings are easily perishable so cannot be held in ordinary warehouses or by the typical farmer for extended periods of time. These stores help ensure the year-on-year continuation of production even if the preceding harvest proved unfruitful. However, Barker wants to see cold storage grow in Zambia in order to make the country fully self-sufficient and a net exporter.
Food security is a key priority for both the Zambian government and international agencies. In an agreement signed at the US-Africa Leaders Summit earlier this month, USAID and the Zambian government agreed to cooperate through the Prosper Africa initiative to increase regional food security. While the initiative will focus specifically on reducing post-harvest losses on Maize, the improvements in research and equipment are designed to improve the efficiency and security of food production across the board.
Zambia Investor Briefing December 2022
ZAMBIA INVESTOR BRIEFING
December 2022
OVERVIEW
President Hakainde Hichilema travelled to the US to take part in the US-Africa Leaders Summit, hosted by US President Joe Biden in Washington, D.C. The summit was attended by almost all African heads of state, in addition to business leaders and investors from the continent. While there, President Hichilema participated in the inaugural US-Africa Business Forum, co-hosted by the US Department of Commerce, the US Chamber of Commerce and the Corporate Council on Africa, in partnership with the US government’s Prosper Africa initiative.
A US-based company, KoBold Metals, will invest USD 150 million in Zambia’s Mingomba mine project. The deal was announced by President Hichilema at the recent US-Africa Leaders Summit. The California company, which is backed by tech tycoon Bill Gates, said the Mingomba project’s potential to become “one of the world’s top-tier mines”, was why they were so attracted to the deal. KoBold Metals are buying into the joint venture with Australian firm EMR Capital and ZCCM-IH.
The DR Congo and Zambia have signed a Memorandum of Understanding (MoU) with the US. The agreement promises US support to both the DR Congo and Zambia in developing an electric vehicle value chain. Present at the signing, which took place on the first day of the US-Africa Leaders Summit, were US Secretary of State Anthony Blinken, DR Congo Vice Prime Minister and Foreign Minister Christophe Lutundula and Zambian Foreign Minister Stanley Kakubo.
Canadian mining company First Quantum Minerals (FQM) are to pay the state-backed ZCCM-IH in revenue royalties, rather than dividends, following negotiations between parties.
President Hichilema opened a new one-stop-border-post at Mchinji-Mwami with his Malawian counterpart Lazarus Chakwera. The border post is of “vital importance to the economies of Zambia and Malawi”, the president said.
Radisson Hotel Group has opened its first Zambian resort. Found on the banks of the Zambezi River and just 4km from Victoria Falls, Radisson Blu Mosi-oa-Tunya Livingstone Resort is the Group’s first safari resort in Africa.
Mining Developments
President Hichilema travelled to Washington, D.C., to attend the US-Africa Leaders Summit, which took place over 3 days between 13-15 December. The summit aimed to strengthen ties between the world’s largest economy and its African partners.
While there, the president announced a USD 150 million investment in the Mingomba mine, thought to be the world’s highest-grade undeveloped large copper deposit. The pledge came from KoBold Metals, a California-based artificial intelligence firm backed by Bill Gates and EMR Capital.
EMR Capital executive chairman Owen Hegarty told reporters that KoBold Metal will take a 52% stake in the Mingomba project, while the other joint venture partners, EMR Capital and Zambia's state-backed ZCCM-IH, will own 28% and 20% respectively.
Elsewhere, Canadian mining company FQM has agreed to convert dividends from its copper mine at Kansanshi to a revenue royalty. According to the agreement, ZCCM-IH will receive 3.1% in a revenue royalty from the mine, which is forecast to produce between 140,000 and 150,000 tons for the financial year ending December 31.
According to economist Oliver Saasa, the deal will allow ZCCM-IH to extract more value from the Kansanshi mine than would have previously been the case with the divided model. “The overall average revenue from the royalty model that ZCCM-IH has opted for is expected not only to be higher, but also more predictable and consistent”, he told Mining for Zambia. “If you ask me, this could be a model for all mining business[es] in Zambia to consider”.
Debt Management
US Treasury Secretary Janet Yellen held a closed-door meeting with President Hichilema during his recent trip to the US. The pair discussed “the need to address debt sustainability and the imperative to conclude a debt treatment for Zambia”, according to Yellen. She added that it was important for Zambia’s creditors to conclude an equitable debt restructuring deal as quickly as possible to lend credibility to the G20 Common Framework for poor country debt relief.
Yellen also announced plans to visit the continent from 17-28 January, taking in Zambia, South Africa and Senegal. US President Joe Biden too said he hoped to visit next year, which would be the first visit to sub-Saharan Africa by a sitting US president since Barak Obama’s in 2015.
President Hichilema held further meetings with World Bank officials in Washington, D.C., accompanied by Minister of Foreign Affairs Stanley Kakubo, Commerce Minister Chipoka Mulenga and Mines Minister Paul Kabuswe.
Other sideline discussions at the summit yielded a promise from the Millennium Challenge Corporation, an independent US government foreign aid agency, that a second so-called compact aid package would be signed with Zambia in 2023, targeted largely at the agriculture sector. The first of such packages was secured in 2018, with USD 355 million aimed at boosting the country’s supply of drinking water.
Regional Partners
The New Dawn government has agreed to further help the US secure batteries for electric vehicles. An MoU was signed between the US, Zambia and the DR Congo, aiming to develop an industry to process strategic raw materials like cobalt, lithium, nickel and manganese in the Copper Belt.
Closer to home, President Hichilema launched the Mchinji-Mwami one-stop border post with his Malawian counterpart, Lazarus Chakwera. “We are one people and we need to invest jointly to grow the economies of our two countries”, he remarked at the ceremony.
LATEST TRENDS
GDP
Inflation
Currency
1 USD = 17.86 ZMW 30 day average = 17.220 Volatility (last 30 days) = 0.42%
OTHER NEWS
IMF to assess Zambia in spring, urges debt deal with creditors, 09.12.22, Reuters
Government calls on proper management of mineral resources in Mkushi, 12.12.22, Lusaka Times
ZDA calls for increased trade and investment between Zambia and USA, 12.12.22, ZDA
Beeline Telecom to launch operations in January 2023, 13.12.22, Lusaka Times
Debt defaulter Zambia seeks to offload costly presidential Gulfstream jet, 15.12.22, Bloomberg
Government launches interim guidelines on carbon market and trading, 19.12.22, Lusaka Times
Government implores stakeholders to invest in electricity generation, 19.12.22, Lusaka Times
HH to hold end of year press conference, 20.12.22, Diggers
UPCOMING EVENTS
25.01.23 - 29.01.23
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Livingstone, Zambia
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PHYLA Earth: Regenerative Agriculture for Zambia’s Future
PHYLA Earth is a remarkable organisation focusing on investment in “nature’s capital”. By engaging communities and corporations, weaving novel technologies together to find remarkable solutions, and connecting partners to new markets, they seek to boost the triple bottom line: bringing economic, social, and environmental benefits to Zambia.
PHYLA use advanced agronomic technologies to help farmers improve their soil management and encourage “regeneration agriculture” across Africa’s Great Green Wall. The Great Green Wall is a remarkable initiative to build an unbroken line of trees stretching 8,000km across the middle of the African continent to help fight the effects of climate change.
In Senegal, The Great Green Wall is using Acacia trees to help fight desertification. At its worst, this phenomenon can force families from their homes as the land becomes arid and leaves people’s home communities unliveable. In Zambia, PHYLA are hoping to use regenerative agriculture to engineer a new wealth creation dynamic; restoring arable land through resistant ecology in order to improve the land, create jobs, bolster communities, sequester carbon and produce food.
At COP27 PHYLA Earth’s CEO Rabih El Fadel and co-founder Harry Verns showcased their flagship project: the Pongamia regenerative agroforestry project at Konkola Copper Mines.
Konkola Copper Mines (KCM) is one of Africa’s largest integrated copper producers. The Zambian mine produces millions of tons of copper per year, which is fundamental to the electric battery value chain and so the future of sustainable transport. The metal is also central to the present and future prosperity of Zambia.
However, mining often comes at an environmental cost. In this case, mining increases the salinity and sodicity of the surrounding soil and limits natural plant growth – an issue for 833 million hectares of soil worldwide.
PHYLA Earth are developing a remarkable orchard in Chingola, Zambia, in order to combat this problem. Their work facilitates the prospect of continued extraction of minerals needed for the transition to clean energy, whilst supporting local farming and increasing ecological resilience.
The 4,000 elite Pongamia seedlings planted on untreated land next to the mines have experienced a mortality of less than 1%. The trees have instead grown, flowered, and produced pods in quantities expected from much more fertile soil. From an ecological perspective, the main benefits of Pongamia tree-based agroforestry is the potential to restore biodiversity, binding the soil with its roots and providing life giving nectar for vital pollinators.
But the benefits go even further. Pongamia have significant climate resistant properties, weathering drought, salinity changes and high levels of metals in the soils better than other plants. Seedlings, meanwhile, can be used as biopesticides, insect repellents, and as a source of food-grade vegetable oil.
According to the United Nations, investments in nature-based solutions to climate change must treble by 2030 if the world is to tackle the triple threat of climate, biodiversity and land degradation. PHYLA seek to foster a circular bioeconomy to meet this challenge. ]
The development of Pongamia orchards provide jobs and income. This income is in turn expected to facilitate further Pongamia plantations - again increasing biodiversity and providing more seedlings for useful by-products. The conceptual circularity of this cycle allows PHYLA to believe such investments can create what they refer to as “perennial dividends” on the initial investment.
The project is being extended to target 1.5 million saplings next year in India and Southern Africa.
At COP27 PHYLA showcased the Chingola project and made the case for why they believe “agro forestry is the perfect tool to remediate degraded land and rural markets” and to explain how “our trees provide farmers with highly productive, carbon removing perennial, drought tolerant option to increase farm revenue and power local economies.”
The company’s approach recognises that nature provides infinite value to the economy but requires unprecedented investment to secure future returns. PHYLA wishes to see the reconstruction of economic models to include nature as the planet’s most precious asset.
Tackling deforestation is a priority of the Zambian government. Environmental sustainability is one of the four pillars supporting the UPND’s economic transformation plan outlined in the Medium-Term Budget Plan. To this end, the New Dawn government are setting up timber exchanges around the country in order to increase transparency and reduce illicit and damaging deforestation practices.
Further, if you wish to invest in PHYLA Earth, it is worth knowing that green bonds (with a maturity of at least three years) have been granted tax exemptions aimed at encouraging investments in projects with environmental benefits.
PHYLA’s remarkable work would not be possible without the cooperative research of the University of Zambia, the University of Reading (UK) and the University of Bradford (UK). Such international intellectual exchanges and research are vital to driving the world’s economy towards a cleaner future. PHYLA’s researchers include specialists with 50 years of dedicated practice.
Thinking of investing in Zambia’s agriculture industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com
KoBold Metals: The Mining Exploration Firm Using AI To Lead The Electrical Revolution
Last week it was announced that US-based mining exploration firm KoBold Metals would be investing $150 million to develop the Mingomba copper-cobalt mine in Zambia.
The new deal is a joint venture between private equity firm EMR Capital and Zambia’s state-backed ZCCM Investment Holdings (ZCCM-IH) and is set to close within the first quarter of 2023.
KoBold Metals is a start-up firm which uses artificial intelligence (AI) and machine learning to coordinate mining for metal deposits used in making electric car batteries. The company, which began its mining operations in Canada two years ago, aims to create a “Google Map” equivalent of the Earth’s crust, highlighting areas which have high levels of cobalt and copper deposits.
This ‘mapping’ is done by collecting and analysing streams of data of both new and old deposits. The company then uses algorithms to determine where new deposits may be found. As a result, KoBold is better equipped to locate minerals that may have been overlooked by more traditional methods of exploration.
Despite being such a young company, Kobold already has an impressive portfolio, having acquired multiple exploration sites in Quebec, Saskatchewan, Ontario, and Western Australia.
The start-up also has an impressive lineup of stakeholders and investors. These include Australian multinational mining company BHP and support from climate and technology innovators Breakthrough Energy Ventures.
Founded by Bill Gates in 2015, Breakthrough is an umbrella company for a range of organisations that aim to accelerate the innovation of sustainable energy sources to mitigate the effects of climate change. The company is also backed by Amazon’s Jeff Bezos and Virgin’s Richard Branson.
Kobold’s chief executive officer, Kurt House, who has been working with the company for over five years, has previously stated that he does not want to be considered a mining operator “ever,” and that the company root itself in leading the way for the “electric vehicle revolution.”
The new Zambia-based project is a major step forward for both the company and the country. Firstly, it will place President Hakainde Hichilema on good footing to achieve his ambitious copper production target of 3 million tonnes a year by 2032.
Secondly, the Mingomba mine presents a major opportunity to KoBold. The company previously said that the mine is set to be "one of the world's top-tier mines.” They also found that it contains an estimated 247 million tonnes of ore with an average grade of 3.64% copper. That is six times purer than similar deposits found in Chile.
This high quality mine will not only generate more tax revenue for the government but also provide jobs for many Zambians. It will also support Zambian-run businesses within the mine’s value chain in everything from machinery to transportation.
Furthermore, as global consumers make changes towards more climate-friendly options demand for electric vehicles will continue to grow. It is estimated that the global copper industry will need upwards of $100 billion to meet the infrastructure requirements to meet with this demand. With Zambia being the second largest copper producer in Africa, this deal solidifies the key role that the country will play in the green economy going forward.
Photo: Khusen Rustamov from Pixabay.
‘Momentous’ Day for Zambia as US-Africa Summit Draws to a Close
As the US-Africa Leader’s Summit draws to a close, President Hichilema has praised “a momentous day for the people of Zambia” as the U.S. company KoBold Metals announced a $150 million dollar (K2,654,442,000) investment to explore and develop Zambia’s Mingomba Copper Mine.
This exciting partnership is set to create jobs for Zambian citizens whilst reinvigorating an underutilised national asset. The deal constitutes part of a highly successful trip that included numerous partnerships, public talks, and a meeting with the President of the United States, Joe Biden.
The trip represents an important step in strengthening Zambia’s economic outlook and amplifying its international reputation as promised during the 2021 election campaign. President Hichilema has utilised the newly agreed IMF Extended Credit Facility to drive foreign investment, foster macroeconomic growth, and more than half the rate of inflation since coming to power.
Zambia’s newest investor, KoBold Metals, is seeking to generate a return on their investment by developing the underutilised copper deposit at Lubambe Copper Mine. Under the terms of the agreement, KoBold will pay EMR Capital, the 80% shareholder of the Lubambe Mine, $115 million to develop the existing mine whilst acquiring a majority stake in the Mingomba copper deposit. Backed by Bill Gates’s Breakthrough Energy Ventures, KoBold seek to use artificial intelligence to responsibly mine for the rare earth metals that are central to the construction of electric vehicles and smartphone technology.
Hichilema speaks at the U.S. Africa Business Forum following the announcement of KoBold Metal’s historic investment. Image via Twitter (@usembassyzambia)
Mingomba represents KoBold’s largest investment yet, estimated to contain over 9 million metric tons of copper. However, as yet it has not been determined where the mineral resources end on this site. It is hoped new technology will help answer this question. As global concerns grow over the scarcity of rare earth metals, the firm seeks to use AI to guide where to procure land, what data to collect, and where to drill in order to find the precious commodities hidden further under the earth’s surface.
“Converted to copper contained in electric vehicles, it’s like 100 million electric vehicles [contained within the mine],” according to KoBold’s President, Josh Goldman.
Speaking in Washington on Wednesday, President Hichilema emphasised that to meet the country’s growth ambitions “new ideas, and new technology” must be utilised. President Hichilema has repeatedly stated his ambition to more than triple Zambia’s annual copper production to 3 million metric tons. Utilising AI to get the most out of dormant or under-utilised sites such as this can unlock one of the highest-grade copper resources in the world. Initial discoveries were first made at the two sites in the 1920s but as mapping technology improves, its true potential is increasingly unveiled.
Michael Gonzales, U.S. ambassador to Zambia, told the press that the deal “sends a powerful signal that the U.S. and its allies can and will compete successfully for the minerals and resources that will power the global clean energy transition.”
The deposits are located in the rich Central African Copperbelt, the same area in which the Kansanshi copper mine is located. Earlier in the year, First Quantum Minerals Ltd. approved a $1.25 billion project to extend mining operations at Kansashi. Zambia and the Democratic Republic of the Congo recently signed a Memorandum of Understanding in which the U.S. will support the two countries in further developing an electric vehicle value chain. Such extensions will prove vital in the realisation of the goals set out in the memorandum.
Zambia and the DRC sign an MoU on electric vehicle value chains at this week’s summit. Image via Twitter (@HonKakubo1)
Speaking recently at the 5th Annual Corporates and Diplomats Gala in Lusaka, the U.S. ambassador praised the “excellent strategies and policies” being implemented by the government. “If the government is going to continue implementing these strategies, the country will go far in terms of development.”
The Government of Zambia has made particular efforts to induce foreign direct investment through its recently launched Zambia is Back campaign. The campaign seeks to help companies and financiers work alongside the government and to connect them with local private sector partners to foster growth. Tax concessions have also been introduced for 2023 in the manufacturing, tourism, and green energy sectors with a view to maintaining 4% year-on-year growth and achieving middle-income status by 2030.
Owing to its young, growing populations and the rich deposits of rare earth minerals that are set to prove so vital to the future of electric cars and smartphone technology. In this context, President Biden is courting African leaders for their friendship and support. Sites contained within the Central African Copperbelt have world-leading deposits of cobalt and lithium which are vital in the Sino-American competition to lead innovations in next-generation computing and decarbonisation.
The Biden administration is now openly supporting proposals to include the African Union (AU) in the G20. This is a clear move to recognise the importance of the continent and suit its leaders. Such a move would make the AU the second regional body recognised by the forum for economic cooperation after the European Union. The group already accounts for 85% of global GDP, and 65% of the world’s population. The inclusion of African nations would further bolster the global standing of the group whilst increasing the ability of African nations to determine the global political and economic agenda.
President Hichilema meets Joe Biden, President of the United States of America, and First Lady Jill Biden. Image via Twitter (@HHichilema)
President Biden has also raised the prospect of expanding the UN Security Council to include permanent representation for Africa. The move may be unpopular in some circles as ultimately expansion is dilution within the Council, but Biden is seeking an era of more equitable partnerships between African nations and foreign powers. Just last week, Judd Devermont, senior director for African Affairs at the National Security Council commented that “it’s past time Africa has permanent seats at the table in international organisations and initiatives… we need more African voices in international conversations that concern the global economy, democracy and governance, climate change, health and security.”
In a further deal sealed at the summit, Zambia will be partnering with USAID through the Prosper Africa Initiative to address the global food security crisis. Highlighting the impact of the war in Ukraine in exacerbating global shortages, USAID has pledged to match private sector investment 1:1 to magnify the impact food security initiatives can have on the continent. The partnership between Africa Global Schaffer, Bechtel, and the Export Trading Group will begin in Zambia by building green, Smart Integrated District Aggregation Centers to improve the production and efficiency of maize – a crop that commonly experiences high post-harvest losses. The partners will utilise equipment to protect post-harvest crops whilst the centers will be designed to connect sellers with buyers at key points along vital East African trade routes. One-third of these centers will be run by female smallholder farmers. Eliminating post-harvest maize loss has the potential to provide over 1.5 million Zambians with their necessary daily calorie requirements and improve nutritional outcomes.
Hichilema meets Senator Menendez the chairman of the Senate Foreign Relations Committee. Image via Twitter (@SFRCdems)
President Hichilema has been striving to increase Zambia’s global voice during his visit to Washington. Beyond the US-Africa leaders’ summit, he has attended the Civil Society Forum, and was hosted by the Senate Foreign Relations Committee. The committee, via Twitter noted how they “deeply appreciated the opportunity to speak about our shared commitment to strengthen Zambia’s democratic institutions and to pursue future economic prosperity and broader regional security.”
The summit has been received warmly on both sides of the Atlantic. An impressive $15 billion dollars of two-way trade and investment deals were concluded over the course of the summit. In his closing remarks Biden emphasised he has “known for a long time that Africa’s success and prosperity is essential to ensuring a better future for all of us, not just for Africa.”
What to expect as US-Africa summit kicks off in Washington
Al Jazeera, December 13, 2022
US President Joe Biden seeks to boost trade opportunities and build trust with African leaders during three days of talks.
The United States aims to boost cooperation with African nations as President Joe Biden hosts dozens of regional leaders at the second US-Africa Leaders Summit this week in Washington, DC.
Beginning on Tuesday, the three-day summit will focus on key challenges, including the climate crisis, good governance, food security and global health, as well as bolstering US-Africa trade and investment opportunities.
“The summit … is rooted in the recognition that Africa is a key geopolitical player. The continent will shape the future not just of the African people, but also the world,” US National Security Adviser Jake Sullivan told reporters on Monday afternoon.
Forty-nine African heads of state and leaders, as well as the African Union, were invited to the summit, Sullivan said during a news conference.
The talks – a follow-up to the first such gathering hosted by former US President Barack Obama eight years ago – mark the biggest international gathering in Washington, DC, since before the start of the COVID-19 pandemic.
Biden has sought to rebuild Washington’s relationship with other countries, as well as to re-engage with global organisations like the United Nations, after four years of his predecessor Donald Trump’s “America First” approach to foreign policy.
The US role in Africa receded during that time, and Biden administration officials have stressed the need to strengthen ties with like-minded countries in the region.
“Working closely with Congress, the US will commit $55bn to Africa over the course of the next three years,” Sullivan said on Monday.
China, Russia competition
The summit comes as China, which the US views as its main global competitor, has consistently outpaced Washington in its investments in Africa. Russia is also trying to rally support on the continent in response to pressure from the US and its allies over the war in Ukraine.
However, in the lead-up to this week’s meetings, top Biden administration officials played down their growing concerns about China and Russia. Instead, they have stressed the importance of including African nations in global discussions.
“We need more African voices in international conversations that concern the global economy, democracy and governance, climate change, health, and security,” White House Adviser Judd Devermont said on December 9.
In August, the Biden administration released a new strategy document for sub-Saharan Africa, stressing the region’s importance and promising to extend defence cooperation with like-minded nations.
In November, US Secretary of State Antony Blinken also said Washington would have to do things differently to help Africa with its infrastructure needs. It was time to stop treating the continent as a subject of geopolitics, but rather as a major player on its own, Blinken remarked.
The region needs billions of dollars a year for roads, railways, dams and power, and in the last decade, it has received huge sums from China, which generally does not tie money to political or rights-related conditions.
Washington has characterised Chinese lending as predatory and leading to potential debt traps. It has instead focused on facilitating private investment, but officials acknowledge that the US needs to do more to speed up assistance.
As part of this week’s summit, Biden will deliver a keynote address to the US-Africa Business Forum on Wednesday, before hosting a dinner for the world leaders assembled in the United States capital.
The US president is expected to back a permanent spot for the African Union in the Group of 20, a forum for major economies, during the summit. Sullivan said Biden also would express a commitment to UN Security Council reform, “including support for a permanent member” from Africa.
“It’s past time for Africa to have permanent seats at the table in international organisations and initiatives,” Sullivan told reporters.
On Thursday, Biden and the other heads of state and leaders will hold talks on promoting food security, after months of supply concerns and disruptions linked to the war in Ukraine. He will also discuss the 2023 elections in Africa and democracy with a small group of leaders, Sullivan said.
“One of the unique aspects of this summit is the collateral damage that the Russian war has inflicted on Africa in terms of food supply and the diversion of development assistance to Ukraine,” John Stremlau, a visiting professor of international relations at the University of the Witwatersrand in Johannesburg, told The Associated Press news agency.
“The opportunity costs of the invasion have been very high in Africa,” Stremlau said.
‘Great opportunities, some risks’
Meanwhile, local officials in Washington, DC, are warning residents to brace for roadblocks and intensified security as the dozens of invited leaders move around the city for the talks.
The US has invited all African Union members in good standing, meaning Burkina Faso, Guinea, Mali and Sudan will not be represented. Attendees must also have full relations with Washington, which excludes Eritrea.
One of the most closely watched leaders expected in Washington will be Ethiopian Prime Minister Abiy Ahmed, a one-time US ally whom the Biden administration has accused of backing widespread abuses in the Tigray conflict. A breakthrough deal last month led to a cessation of hostilities.
The presidents of Rwanda and the Democratic Republic of the Congo (DRC) will also be in attendance, as Blinken exerts international pressure on Rwanda over its alleged support for rebels seizing control of territory in the neighbouring DRC.
Other presidents due at the summit include Egypt’s Abdel Fattah el-Sisi and Tunisia’s Kais Saied, who have both faced criticism for a lack of democratic rights in their countries, as well as Equatorial Guinea’s Teodoro Obiang Nguema Mbasogo, who arrives days after the US called his latest election a sham.
The foreign minister of Zimbabwe, under US sanctions, is also expected to attend.
Analysts say that African leaders will be looking for Biden to make some major commitments during the talks, including announcing his first presidential visit to sub-Saharan Africa, as well as efforts to bolster the continent’s economy through private sector investment and trade.
Mvemba Phezo Dizolele, director of the Africa programme at the Center for Strategic and International Studies, said the US was entering the summit with a “trust deficit” due to the long wait since the last edition in 2014.
“The summit presents great opportunities, but it also poses some risks,” he said.
“This is an opportunity to show Africa that the US really wants to listen to them,” he added. “But now that we have high expectations, the question will be: What will be different now?”
Hichilema Flies to Washington to Attend US-Africa Leader’s Summit
President Hichilema has flown to Washington D.C., in order to attend the US-Africa Leader’s Summit set to begin tomorrow. The three-day event will see leaders across the continent meet with President Biden and his advisors in order to discuss bilateral relations.
On his departure yesterday the President tweeted his excitement to be participating in the summit.
A statement from the Ministry of Foreign Affairs and International Cooperation explained that “President Hichilema and other Heads of State and Government are expected to deliberate on opportunities for public-private partnerships; bolstering the US-Africa economic relationship; access to capital; food insecurity, and promoting sustainable economic growth and development.”
Zambia already has a strong relationship with the United States. The U.S. Ambassador to Zambia recently praised the “excellent strategies and policies” being implemented by President Hichilema. Further, the U.S. Government run development agency, USAID, recently launched two business and trade development projects, with a combined budget of $54 million USD in order to further improve the business environment and promote opportunities for women and youth.
The Hichilema administration, however, still wishes to use the summit as an opportunity to further develop US-Zambia relations. To that end the president will be appearing at the US-Africa Business Forum, the Civil Society Forum, the Conservation, Climate Adaptation and Just Energy Transition Forum, and the Council on Foreign Relations.
The president has repeatedly emphasised that the first year of his administration was for stabilising the economic chaos left behind by former President Lungu, and that the second year of his administration is set on unlocking the potential of the Zambian economy.
There is much anticipation surrounding the meeting, with commentators speculating that this year’s summit may redefine the USA’s relationship with the African continent. Over 50 heads of state are expected to be present at the summit and it is hoped relations will improve after former president Trump spurned African leaders by failing to host a second summit following Obama’s 2014 effort.
Since June 2019, the US government has helped close more than 800 two-way trade and investment deals across 45 African countries, worth an estimated $50 billion in exports and investments. With many African nations seeking investment as a result of post-pandemic global economic stagnation, and the Biden administration’s increasing use of the language of “collaboration” above the historic power imbalances that have defined rhetoric and reality, there is hope the U.S. will start seeing Africa as an ally and partner.
In July, President Biden said the agenda of this year’s summit will be to “build on our shared values to better foster new economic engagement; reinforce the US-Africa commitment to democracy and human rights; mitigate the impact of covid-19 and of future pandemics; work collaboratively to strengthen regional and global health; promote food security; advance peace and security; respond to the climate crisis; and amplify diaspora ties.” This is a long list but officials are optimistic this year’s summit could bring positive change.
AfriLabs: The Annual Gathering Bringing Innovation to Zambia
As the Government of Zambia strives to transform Zambia’s digital and technological space, AfriLabs seeks to connect remarkable businesses in Zambia to an extraordinary network of supportive innovators across the continent.
AfriLabs is a networking organisation that have been supporting innovation on the continent since 2011. AfriLabs’ 2022 Annual Gathering was held this year in Zambia’s capital, Lusaka from in October. This year they celebrated “Intra-African Connectivity, Collaboration and Innovation” during an event billed as the largest convention of African innovation leaders on the continent.
400 visitors from 52 foreign nations, in addition to 3000 virtual participants, came together to celebrate technological innovation in Zambia and Africa.
One AfriLabs member in particular is targeting digital transformation in Zambia. Ehub Zambia act as a technological centre who aim to improve digital competence for people from marginalised communities. Specifically, they aim to teach coding for those in peri-urban and rural communities up to a job entry level ability.
Ehub Zambia believe this technology competence is important not just for the youth’s future, but for the country as a whole. Improving digital skills facilitates the increased integration of Zambia into global financial markets, while increased access to the internet allows SMEs to operate take advantage of international export opportunities. By upskilling these peri-urban and rural communities Ehub Zambia hope to diversify the job opportunities available to those in often marginalised communities.
The new Ministry of Technology and Science is dedicated to transforming the digital economy. They work closely with private sector partners to improve access to and utilisation of digital technologies.
For example, at the end of November the ministry celebrated the establishment of the first 5G network in the country. Felix Mutati, the minister for technology and science, emphasised this as a crucial step in the country’s digital transformation agenda.
Speaking at the network’s launch, the Minister also told the press that the Hichilema administration is also working on a new start-up bill to improve access to funding for new enterprises. This will be welcome news for Madica – another impressive attendee of this year’s Lusaka AfriLabs gathering.
Madica, short for “Made in Africa”, is a young pre-seed investment programme aiming to support under-funded African entrepreneurs through both direct financial investment and, in partnership with companies such as Ehub Zambia and the government of Zambia, is hoping to upskill and increase the network of poorly connected African entrepreneurs
Over the next three years Madica seek to support 25 to 30 African entrepreneurs with up to $200,000 in funding and significant programmatic support. They aim to support bright ideas with little infrastructural support. This is why $6 million dollars of their funding is being held back for programmatic support. Through hands-on support from their team of mentors, plus connections to continent-wide networks through AfriLabs, their goal is to see African start-ups flourish.
Emmanuel Adeboye, head of Madica, explains that although he believes “Africans have an unmatched entrepreneurial spirit”, they’re disadvantaged in the start-up space. African CEOs raise on average 28% less funding than their foreign educated counterparts, whilst funding in Africa is disproportionately swayed towards male CEOs.
“We hope that Madica can help change the narrative around African start-ups – lower the perception of risk, attract more capital, inspire more founders, and garner more media attention”, commented one Madica executive.
Since 2021, Zambia has received an extraordinary amount of investment in order to stimulate its economy. For example, in Q3 of this year, Zambia received $1.1 billion in future investment pledges expected to create over 8,000 jobs. However, much of this funding has come from abroad.
Madica wish to foster the “innate ability of Africa to build Africa” through supportive pan-African networks and investment programmes. Speaking ahead of the conference, Mutatu expressed his excitement at the opportunity “for Zambia to show more of its potential as a leader in entrepreneurship and innovation in the Southern African region.” He spoke in agreement with the directors of AfriLabs and Madica in saying that “if we are to make progress as an African continent, the doors must be open to each other.”
With the government of Zambia seeking to foster partnerships with the private sector in order to accelerate the nation’s digital transformation, and organisations such as AfriLabs actively enhancing connectivity and engendering rapid sector growth, now is a decisive and opportune time to invest in the nation’s potential.
First Quantum to pay ZCCM-IH in revenue royalty following Zambia tax change
FIRST Quantum Minerals has agreed to convert dividends from its Zambian copper mine Kansanshi to a revenue royalty, the Canadian firm said today.
The agreement follows fiscal changes implemented by Zambian president Hakainde Hichilema shortly after his election in 2021 in which royalties were made tax deductible.
In terms of the agreement, Zambia’s government-controlled ZCCM-IH will receive 3.1% in a revenue royalty from the mine which is forecast to produce between 140,000 and 150,000 tons for the financial year ended December 31.
First Quantum said ZCCM-IH would continue to be represented on the Kansanshi Mining board to “ensure full visibility and transparency in respect to KMP’s future operations”.
“We are pleased to enter into this new arrangement for the benefits flowing from the Kansanshi mine,” said Tristan Pascall, CEO of First Quantum in a statement today.
The royalty-for-dividends agreement comes ahead of the proposed $1.25bn expansion of Solwezi section, known as the S3 project, at Kansanshi. This was announced in May when a total of $1.35bn in projects for Zambia were unveiled including the final $100m installment on its $250m Enterprise nickel project in Kalumbila.
“We look forward to continuing the collaborative relationship with ZCCM-IH as we advance KMP,” said Pascall.
The agreement with the ZCCM-IH is further evidence of a thawing of relations between First Quantum and the Zambian government following Hichilema’s election. Two months after his election he reformed the country’s tax regulations in its national budget.
The S3 project will extend the life of Kansanshi until the 2040s, and increase copper and gold production by around 25%. The project will also add approximately 800 permanent jobs, and a further 1,800 during the construction phase.
“Crucially, it also safeguards the futures of the 8,500 people already employed at Kansanshi,” First Quantum said earlier this year.
The Enterprise mine will produce some 10,000 tons of nickel concentrate a year. According to First Quantum it will make Zambia a “pre-eminent nickel producer” supplying manufacturers of batteries for electric vehicles. The mine is expected to be operational within 12 months’ time and employ about 700 full time staff.
This article originally appeared in Miningmx
Zambia Investor Briefing - November 2022
ZAMBIA INVESTOR BRIEFING
November 2022
OVERVIEW
According to the Zambia Development Agency (ZDA) Zambia recorded USD 1.1 billion worth of investment pledges in Q3 2022, comparing favourably to USD 631 million in Q3 2021. ZDA projects that the 95 investment ventures will create more than 8,000 new jobs. Manufacturing attracted the most investment (USD 396 million), with energy, mining construction, transport, services, tourism, real estate, health and agriculture also featuring.
The Bank of Zambia has maintained the monetary policy rate unchanged at 9%, forecasting growth at 3% for 2022, 4% in 2023 and 4.1% in 2024. Governor Denny Kalyalya indicated that he expected inflation to continue its recent downward trend and return to the target range of 6-8% in Q1 2024, with an average of 8.5% expected in 2023. The next Monetary Policy Committee meeting is schedule for February 13 and 14, 2023.
President Hakainde Hichilema travelled to COP27 in Egypt where he met with creditors to press for the finalisations on a memorandum of understanding (MoU) on debt reduction. During the conference he also signed an MoU with the European Union on Forest Partnership as part of the EU Green Deal.
MTN Zambia launched its 5G service on November 24. The service covers approximately 65% of the population in Lusaka, Kitwe and Ndola, in addition to parts of Chingola, Solwezi and Kalumbila. MTN aims to reach 100% 5G coverage for Lusaka, Kite and Ndola by mid 2023, as well as continuing its rural connectivity programme. Meanwhile, Minister of Technology and Science Felix Mutati said government wants to achieve 100% internet connectivity by 2024.
The US launched two new projects in the country. USAID TradeBoost is a USD 30 million investment project to increase trade and investment nationally, regionally and internationally, while the USAID Business Enabling Project is a USD 14 million initiative to bring inclusive private sector investment and trade to Zambia that includes a strong focus on increased opportunities for women.
Government launched a fund in partnership with Huawei - the Hakainde Hichilema Innovation Fund. Under the initiative 50 young Zambians will receive scholarships in the ICT sector.
Mining Developments
As of November 21 Zambia’s mining cadastre office is accepting new license applications, having reopened on October 19 following its closure in February as part of efforts to clean up the licensing process.
The 10th Zambia International Mining, Energy Conference and Exhibition (ZIMEC) attracted over 300 delegates in Kitwe. During the President’s address he reiterated the government’s “steadfast commitment to meeting the ambitious yet achievable goal of raising annual copper production levels from the current 830 metric tons to 3 million metric tons.”
This month President Hichilema opened a new manganese mine in Luapula province. The 40 million tonnes deposit will be mined over a 20 year period. The mine is Zambian owned by Musamu Resources. The mine currently employs 250 people, which is expected to increase to 1,000 in five years time.
Debt Management
The Export-Import Bank of China (EximBank) is expected to lead Beijing’s team to renegotiate loans owed by Zambia to Chinese state-owned creditors worth almost USD 6 billion. The World Bank and IMF officials continue to press creditors to accelerate negotiations and US Ambassador to Zambia Michael Gonzales called on creditors to reduce the capital that is owed. Bank of Zambia Governor Kalyalya has indicated that he expects debt restructuring to conclude over the first half of 2023 with a significant positive impact on the budget. Meanwhile, the government has hired a private firm to audit domestic debt.
Events
The International Growth Centre (IGC) hosted the inaugural Zambia Economic Growth Forum 2022 (EGF) in partnership with the Government of Zambia. President Hichilema delivered the keynote during which he reiterated the importance of prioritising economic growth.
Speaking at the 2022 Zambian Association of Manufacturers - Proudly Zambian Expo President Hichilema directed the Ministry of Commerce, Trade and Industry to deliver reductions to business licensing costs.
Zambia hosted the 2022 Innovation Africa Ministerial Summit under the theme “digital transformation in education and skills development for Africa.” The event was officially opened by President Hichilema who called for joint efforts towards advancing innovation, transformative education and skills development on the continent, through impactful partnerships between government and industry.
Accountability and Transparency
Government launched the Risk Management Guidelines for the management of resources in the public sector. Commenting on their launch Minister of Finance Situmbeko Musokotwane said they were aimed at improving transparency, accountability and good governance.
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OTHER NEWS
Zambia central bank launches "go cashless" campaign, 03.11.22, CGTN
Zambia gets a new lease of life, 04.11.22, fDi Intelligence
EXCLUSIVE Zambia says EximBank to represent Chinese lenders in debt talks, 08.11.22, Reuters
US Envoy Says Zambia Debt Restructure Must Inolve Haircuts, 13.11.22, Bloomberg
Jubilee Metals produces first export quality cobalt in Zambia, 22.11.22, Proactive Investors
Entain makes first play in Africa launching bwin Zambia, 17.11.22, SBC News
Fintech Unicorn Chipper Cash set to buy Zambia fintech pioneer Zoona, 18.11.22, TechCabal
Why Now Is the Right Time to Invest in Zambia, 24.11.22, Lusaka Times
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Celebrating 25 Years of Chinese Banking in Zambia
Last Friday (November 25), the Bank of China celebrated 25 years of banking in Zambia. At a special event held in the country’s capital, Lusaka, the bank’s Managing Director, Wang Qi, the Chinese Ambassador to Zambia, Du Xiaohui, the Bank of Zambia’s Deputy Governor, Francis Chipomo, and the Minister of Finance and National Planning, Situmbeko Musokotwane came together to celebrate the continuing partnership between the two countries.
Mr Qi expressed his pride at the Bank’s long service to the people of Zambia and went on to pledge the Bank’s ardent support to the country’s economic development.
“The fact that a Chinese financial institution has taken root, grown and thrived in Zambia shows that the Chinese government and Chinese financial institutions have been bullish on Zambia’s good business environment and broad development opportunities,” commented the Chinese Ambassador, Du Xiaohui.
The Bank of China estimate they have provided $3 billion in economic development stimulus and contributed $44 million in tax revenue to Zambia.
Partnerships between the two countries continue to grow. More than 60 Zambian companies have established connections with Chinese partners since the arrival of the Bank of Zambia. To foster these ties, more than 40 Zambian companies participated in this year’s China International Import Exposition.
The exposition, which is held yearly in Shanghai, is estimated 150,000 domestic and foreign professional purchasers attend the event. As of 2018, bilateral trade between the two countries topped $5 billion, 80% of which is Zambian exports to China. Much of this trade is focused on the country’s copper production. Despite already being the second largest copper producer in Africa, President Hichilema has committed to growing the industry further, doubling production between 2026 and 2032 to 3 million metric tonnes.
The two countries are also cooperating in the technology sector. Last week, it was announced telecommunications firm MTN, in partnership with Chinese company Huawei, would be launching a 5G network in Zambia. The network is hoped to service 65% of the populations of Lusaka, Kitwe and Ndola in addition to parts of Chingola, Solwezi and Kalumbila. The government is hoping to reach 100% internet connectivity by 2024.
Mr Qi praised the Bank of China as a bridge that facilitates exchanges between the two countries. Zambia was, in fact, the first African nation the Bank of China established itself in and since then the nation has become China’s second largest trade partner on the continent.
Musokotwane, Minister of Finance and National Planning, spoke at the celebration and praised the Bank for its role in support economic development on the continent. He added that the New Dawn administration hopes to do everything in its power to strengthen its relationship with China.
The government is attempting a rapid economic transformation to become a middle income country by 2030, just a decade after former president Lungu’s mismanagement sent the country into default. Noting China’s economic explosion in the late 20th century, Musokotwane commented that he could learn many lessons from China’s rapid development.
Speaking on Wednesday, Musokotwane confirmed the two countries were in “active engagement” over the restructuring of Zambia’s debts to Chinese creditors. Renegotiations are ongoing, but with the Bank of China’s presence and the impressive foreign investment pledges recently reported by the Zambia Development Agency, it is hoped the China-Zambia relationship will grow and Zambia will take a more prominent place on the global economic stage in the years to come.
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