Zambia to exit sovereign default as bondholders back restructuring
Zambia is closer to ending almost four years in default on its sovereign debt after nearly all holders of the southern African nation’s US dollar bonds voted to approve a long-delayed restructuring plan.
Holders of more than 90 per cent of the nearly $4bn in bonds had already backed the plan by last week ahead of a May 30 deadline, Zambia’s finance ministry said on Tuesday.
The support means Africa’s second-biggest copper producer is on track to implement a restructuring of the debt next month, after its 2020 bond default highlighted growing problems with the international architecture for resolving debt crises in poor countries.
President Hakainde Hichilema’s government finalised a deal on the bonds only in March after overcoming objections by China, Zambia’s largest creditor, that an initial agreement appeared to favour bondholders over other lenders.
“After nearly four years since we initially defaulted on our eurobonds, the close of the restructuring chapter is in sight,” Situmbeko Musokotwane, the finance minister, said.
But while Zambia has also secured relief on over $6bn in debts owed to official lenders dominated by China, the country still has to negotiate terms with more than $3bn of other private debts. These are mostly owed to Chinese commercial lenders.
Zambia has been under pressure to finalise a restructuring in order to continue a $1.3bn IMF bailout, a need that has become more even urgent as a severe drought this year has hit the country’s public finances further.
“Finalising this agreement with bondholders will create the fiscal breathing space necessary for Zambia to remain on a trajectory of sustainable economic growth,” Musokotwane added.
Kristalina Georgieva, managing director of the IMF, issued a call this month for Zambia’s bondholders to support “rapid completion of the debt operation with high participation”.
The bond restructuring will involve cutting the face value of the old bonds by more than a fifth while pushing out maturity dates and payment relief.
Bondholders will receive new debt including a bond that will increase payouts in the years ahead if Zambia can outperform economic targets or the IMF judges that it can carry more debt.
Investors are betting that other lengthy sovereign defaults carried over from recent years are closer to being resolved this year, including Ghana and Sri Lanka.
But the delays have meant many have grown sceptical of a G20-backed process to overhaul debt workouts that was open to poorer countries such as Zambia and Ghana. The Common Framework was meant to improve co-operation between Chinese creditors and western official lenders, but so far has struggled to do so.
“The issue with the Common Framework was that getting everybody into the room meant getting China into the room,” which backfired when China did not participate as planned, one emerging-market debt investor said. “It was well-intentioned, but it was poorly designed.”
This article originally appeared in Financial Times.
Zambia Investor Briefing: April 2024
Do you have a news story you would like included in the next briefing? Email us.
OVERVIEW
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, has reportedly made an offer of over $1 billion for a 51% stake in Konkola Copper Mines (KCM). The proposed deal, allegedly worth over $1.1 billion, would see IRH take a majority stake in the Zambian assets of Vedanta Resources, owned by Indian billionaire Anil Agarwal.
The EU-Zambia Business Forum, held in Kitwe this month, brought together policymakers, industry leaders, and other stakeholders in the copper industry to explore opportunities for sustainable growth and green investments in the Zambian copper industry under the theme ‘Growing the Copper Industry through Sustainable Value Chains’.
Canadian energy producer SkyPower Global has signed a power purchase agreement (PPA) with state-owned utility company ZESCO to deliver 1,000 MW of solar energy. This will support the Green Giant Zambia Project. A statement by President Hichilema said the project aims to substantially increase Zambia’s capacity for renewables in order to address “both current and future energy needs”, both for domestic usage and the mining economy.
The Administrator of the US Agency for International Development (USAID) Samantha Power has promoted the Lobito Corridor investment while on a visit to Angola. The rail line will link Zambia and the DRC to the Angolan port of Lobito and bolster trade and economic development in the region by significantly reducing transport time for the country’s mining output, including copper and cobalt, to reach the coast.
A CLOSER LOOK
Mining Developments
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, has reportedly made an offer of over $1 billion for a 51% stake in Konkola Copper Mines (KCM). The proposed deal, allegedly worth over $1.1 billion, would see IRH take a majority stake in the Zambian assets of Vedanta Resources, owned by Indian billionaire Anil Agarwal. A source told Reuters that the company is seeing interest in KCM from various investors.
It has been a busy few weeks for IRH in Zambia. Reuters reported in March that the Abu Dhabi company was interested in acquiring an 80% stake in Lubambe Copper Mine, despite JCHX Mining having agreed in January to purchase the asset. Shortly after, Hichilema announced the IRH had acquired a 51% controlling stake in Mopani Copper Mines ahead of fellow contenders Sibanye Stillwater and China’s Zijin Mining Group.
Elsewhere, with First Quantum Minerals (FQM) allegedly considering the sale of up to a 30% stake in its copper mines in Zambia, reports emerge of companies considering bidding for a stake. Chief among them is mining conglomerate Rio Tinto and Saudi Arabia’s Manara Minerals Investment. The assets, which include Sentinel and Kansanshi copper mines, are also being apparently being assessed by China’s Zijin Mining Group and Japanese companies Mitsui and Sumitomo. It is likely FQM will seek initial bids in the coming weeks.
Debt Restructuring
Following the welcome news at the end of March that Zambia had agreed a revised debt restructuring deal with bondholders, government is now in now in talks to restructure $3.3 billion of commercial debt. Commercial lenders yet to agree to a deal include Chinese state-owned China Development Bank and Industrial and Commercial Bank of China, regional African Export-Import Bank, and western Standard Chartered. Finance Minister Situmbeko Musokotwane has expressed optimism, telling Bloomberg: “We expect the deal to be done in months” having already made “a lot of progress”.
FDI
The EU-Zambia Business Forum, held in Kitwe this month, brought together policymakers, industry leaders, and other stakeholders in the copper industry to explore opportunities for sustainable growth and green investments in the Zambia copper industry under the theme ‘Growing the Copper Industry through Sustainable Value Chains’. Hichilema officiated and addressed the summit. The EU delegation was led by Henrik Hololei, special advisor at the European Commission Directorate for International Partnerships. Hololei has since announced the EU is ready to support Zambia in making its railway network fully operational. The revitalisation of the railways will play a major role in transforming the nation’s economic growth.
Elsewhere, in a significant boost for Zambia’s mining economy, Japan has committed $1.5 billion to support investments in Zambia’s mines by Japanese companies. This was announced during a bilateral meeting in Tokyo between the Minister of Economy, Trade and Industry Paul Kabuswe and Japanese officials at the sidelines of the Zambia-Japan Mining Investment Seminar.
In other news, State House hosted Speaker of the Senate of the Czech Republic Milos Vystrcil, who was leading a delegation from the Czech business community to explore opportunities in Zambia.
Regional Partners
President Hichilema visited Dar es Salaam to celebrate the 60th anniversary of Tanzania’s Union Day. There he held bilateral talks with the country’s president Samia Suluhu Hassan and met with Dr Akinwumi Adesina, President of the African Development Bank to discuss issues of regional integration.
Hichilema also attended the 12th African Land Forces summit in Livingstone, with the theme was ‘Regional Solutions to Transnational Problems’. The president addressed the gathering of leaders and military personnel as the Chair of the Organ on Politics, Defence and Security of SADC, where he stressed the importance of peace and security to economic growth on the continent.
OTHER NEWS
Zambia: Investment flows to return following $3bn restructure, says finance minister (The Africa Report)
How Gulf states are putting their money into mining (Financial Times, 01.04.24)
Zambia: The journey of building a retail chain for farmers (How We Made It In Africa, 03.04.24)
UPCOMING EVENTS
06-09.05.24 - US-Africa Business Summit, Dallas, Texas
07-11.05.24 - Africa Sustainable Trade Week Expo, London, UK
16-17.05.24 - Africa CEO Forum, Kigali, Rwanda
27-31.05.24 - African Development Bank Group’s Annual Meetings, Nairobi, Kenya
28.05.24 - Zambia-Netherlands Business Forum, The Hague, Netherlands
BackChat Interview: Collins Nzovu, Minister for Green Economy and the Environment
Minister for Green Economy and the Environment Collins Nzovu talks to ZIB’s Choolwe Chibomba about the Government’s response to the ongoing drought, climate change resilience, and Zambia’s role in the global transition to green energy.
Japan Pledges $1.5 Billion for Zambia’s Mines
Japan has pledged $1.5 billion to support investments by Japanese companies in Zambia’s mining industry. This announcement signals a significant boost for Zambia’s mineral wealth development and a potential win-win for both nations.
The commitment was made during a bilateral meeting in Tokyo between Zambia’s Minister of Mines and Minerals Development, Paul Kabuswe, and Japanese officials. Japan’s Minister of Economy, Trade and Industry, Saito Ken, confirmed the eagerness of Japanese businesses to invest in Zambia’s mines.
Japan is not just throwing money at the problem. Taku Ishii, Japan’s METI Vice Minister, emphasized a desire for a long-term, mutually beneficial partnership. He highlighted Japan’s interest in “value addition and jobs for the young generation” in Zambia. This suggests Japanese investment could go beyond simple extraction, potentially including smelting, processing facilities, and skills training for Zambians.
Ishii also pointed to ongoing cooperation between the Japan Organisation for Metals and Energy Security (JOGMEC) and Zambia’s Ministry of Mines in mineral exploration. This includes past training programs for Zambian officials and a commitment to further technical collaboration.
Zambia is keen to leverage this partnership. Minister Kabuswe proposed joint ventures and investments in areas like geological mapping, a crucial step in identifying new mineral resources. He also emphasized the need for capacity building in Zambia’s geological survey department to equip them with the latest technologies for exploration.
Kabuswe expressed his appreciation for Japan’s longstanding relationship with Zambia, with both countries celebrating 60 years of bilateral relations this year. This new pledge of financial and technical support seems poised to further strengthen this partnership.
This article originally appeared on Diplomatic Watch
Zambia Investor Briefing: March 2024
Do you have a news story you would like included in the next briefing? Email us.
OVERVIEW
In a major development that brings Zambia significantly closer to the completion of its debt restructuring, the government has agreed a revised restructuring deal with bondholders for nearly $4 billion. The Zambian government has said it had “received confirmation that the agreed terms are compatible” with the view of official creditors. This leaves only debts to private corporations still in need of restructuring.
International Resource Holdings (IHR), a unit of Abu Dhabi’s International Holding Company (IHC), is reportedly interested in acquiring an 80% stake in Lubambe Copper Mine, despite China’s JCHX Mining having agreed in January to purchase the asset. This comes days after Hichilema announced the UAE firm had acquired a 51% controlling stake in Mopani Copper Mines, ahead of Sibanye Stillwater and China’s Zijin Mining Group.
According to First Quantum Minerals (FQM)’s Chairman Robert Harding, multiple parties have expressed interest in acquiring a minority stake in the mining conglomerate’s Zambian operations.
Fund manager XSML Capital will expand into Zambia this year, its managing partner Barthout van Slingelandt told The Africa Report. Currently based in Angola, the DRC and Uganda, XSML focuses on SMEs – particularly in consumer-facing industries such as retail, call centres and hospitals. The fund is expected to invest in 40 to 50 companies across the four countries with an average ticket size of $2.5 million.
The Zambian government has signed a partner support agreement worth $8.2 million with TradeMark Africa (TMA) to upgrade the Nakonde One Stop Border Post, a key Zambia-Tanzania trade route. The investment is set to streamline operations along the corridor. Speaking at the singing of the agreement, TMA CEO David Beer said the deal marks the beginning of several transformative projects that have been lined up for Zambia.
A CLOSER LOOK
Debt Restructuring
Zambia has agreed a revised debt restructuring deal with bondholders of nearly $4 billion. This deal with private creditors was the final hurdle for the country's debt restructuring, as the president had announced in February that China and India – the last two countries that had been yet to sign as official creditors – had signed agreements to restructure their holdings of Zambian debt.
The Zambian government has said it had “received confirmation that the agreed terms are compatible” with the view of official creditors. The terms include “foregoing around $840 million in claims and offering approximately $2.5 billion in cash flow relief through reduced debt servicing payments during the IMF Programme period”. According to Hichilema: “Now that this is done, our economic recovery is back on track”.
This comes days after Hichilema told the Financial Times that the delay of Zambia’s creditors to end the stand-off over its $13 billion debt restructuring was “an indictment” of the credibility of the global system, as he urged the country’s creditors to “walk the extra mile and close this transaction”.
Mining Developments
International Resource Holdings (IHR), a unit of Abu Dhabi’s International Holding Company (IHC), is reportedly interested in acquiring an 80% stake in Lubambe Copper Mine, despite China’s JCHX Mining having agreed in January to purchase the asset. Lubambe, which is currently owned by the private equity manager EMR Capital, has the potential to be one of the country’s largest copper mines. The Zambian government through ZCCM Investment Holdings owns a 20% stake, and has yet to approve the facility’s sale.
This followed shortly after Hichilema’s announcement that the UAE firm had acquired a 51% controlling stake in Mopani Copper Mines, ahead of Sibanye Stillwater and China’s Zijin Mining Group. According to ZCCM-IH the deal will see $620 million provided in the form of new equity capital, while around $400 million will be provided as a shareholder loan. The Zambian government retains a 49% stake. The president described the deal as a “significant milestone, being the first substantial investment from the UAE in Zambia”.
In other mining developments, First Quantum Minerals (FQM)’s Chairman Robert Harding told Bloomberg multiple parties have expressed interest in acquiring a minority stake in the mining conglomerate’s Zambian operations. According to Harding, the company is looking for a partner that could “perhaps take interest in working with us on a future project”. FQM’s Zambian assets include the Sentinel and Kansanshi copper mines, as well as a nickel mine. Last year the country accounted for around half the company’s copper output and revenue, delivering more than $450 million in profit.
Elsewhere, Jubilee Metals is looking to “significantly step-up” its copper output in Zambia, according to CEO Leon Coetzer. To reflect the company’s planned expansion it has unveiled two separate boards for its Zambian and South African operations.
Foreign Direct Investment
The UK has pledged £6 million to protect Zambia’s forests and cut emissions in the country. Part of the funding will “support the rollout of climate-smart agriculture practices among smallholder farmers”, which will help to strengthen food security. Training is set to be provided to over 100,000 farmers .
This month, Hichilema hosted the Ambassador of Finland Saana Halinen to State House, as well as a delegation of the Finance Committee of the Parliament of Finland. The parties called for increasing cooperation between the two nations, particularly in mining where Finland has a great deal of experience in geological surveying.
The Zambian president also welcomed to State House a delegation from Saudi Arabia, led by its Minister of Environment, Water, and Agriculture Abdurahman Abdulmohsen A. Alfadley. They discussed avenues for future cooperation and investment, particularly technology and mining.
OTHER NEWS
KoBold Metals discovery accelerates global race for critical minerals (The Africa Report, 06.03.24)
Three presidents on how to make global finance work better for Africa (The Economist, 06.03.24)
Bill Gates-backed startup confident it can unearth more buried treasure after a historic copper find (CNBC, 06.03.24)
Blue economies could transform Zambia from landlocked to ‘land-linked’ nation (Daily Maverick, 13.03.24)
European Investment Bank sees green opportunities in Africa (Bloomberg, 13.03.24)
UPCOMING EVENTS
EU-Zambia Copper Business Forum: Growing the Copper Industry in Zambia through Green Value Chains - Kitwe, Zambia, 10-12.04.24
World Travel Market Africa - Cape Town, SA, 10-12.04.24
Invest in Africa Summit 2024 - Wassenaar, Netherlands, 16-17.04.24
20th Annual AVCA Conference & VC Summit - Johannesburg, SA, 22-26.04.24
Sustainable Horizons: Investing in the Renewable Power of Africa (Invest Africa) - Johannesburg, SA, 23.04.24
AfBC Africa Investment Forum 2024 - London, UK, 25.04.24
AIX: Energy in Transition 2024 - London, UK, 25-26.04.24
Select Zambia Investment Forum 2024 - Lusaka, Zambia, 26.04.24
EU-Zambia Copper Business Forum promotes green investments
THE European Union (EU) is hosting a business forum in Kitwe, to bring together European and Zambian businesses in the copper industry.
This event aims to promote sustainable practices and green investments in Zambia’s copper sector.
According to a statement by the European Union – Zambia Business Forum and GRZ Liaison Chisanga Mwanza the event will take place from April 10 to 12, bring together business representatives from Zambia, European and foreign companies active in the copper industry.
President Hichilema opening the Zambia-EU Business Forum.
Key stakeholders including industry experts, policymakers, and entrepreneurs will discuss opportunities for innovation and growth in the copper value chain.
The forum will also showcase investment opportunities for adding value to Zambian copper.
President Hakainde Hichilema is expected to attend the event together with other government representatives, the EU, along with over 100 companies and 200 participants.
The Delegation of the European Union will be led by Mr Henrik Hololei, special adviser at the European Commission Directorate for International Partnerships.
With global copper demands projected to nearly double by 2035, and the green transition as a major objective for Europe and Zambia, the Forum comes at an opportune time to develop ideas and ways of maximizing copper production and value addition to support the private sector in economic diversification and transition to green and circular economy.
Source: Kalemba
$8m Nakonde Border Deal Signed
By Ruth Chayinda
Government has signed a partner support agreement worth 8.2 Million United States dollars grant with Trade Mark Africa for the upgrading of the Nakonde border post.
Trade mark Africa is funded by the United Kingdom.
Speaking during the signing of the agreement and the project Charter, Trade Mark Africa Chief Executive Officer, DAVID BEER said the deal marks the beginning of several transformative projects that have been lined up for Zambia.
Mr. BEER said this will include digital trade and transportation corridors and climate proofing trade.
And Finance and National Planning Minister SITUMBEKO MUSOKOTWANE said the project will signal a move towards a smarter, more efficient trade mechanism that will catalyse growth, create jobs and reduce the cost of doing business.
Dr. MUSOKOTWANE said the project will help decongest traffic, enhance trade facilitation beyond Tanzania and Zambia and other countries.
He also disclosed that President HAKAINDE HICHILEMA will soon be meeting his Botswana counterpart to assess progress made to decongest Kazungula border post.
Meanwhile, the United Kingdom has announced that it will mobilise an additional two Million United States dollars for the necessary construction costs.
British High Commissioner to Zambia NICHOLAS WOOLLEY said this is aside the support already rendered to the preparatory works.
Mr. WOOLLEY said the project is a demonstration of his government’s support to Zambia and towards achieving regional economic integration and boosting trade.
AND World Bank Country Manager, ACHIM FOCK said the Nakonde One stop border post is part of the border transport corridors for economic resilience project.
Mr. FOCK said the bank is also carrying out some works on the project as the Nakonde One Stop border post is a strategic route for Zambia, to promote sustainable transport which is focused on strengthening regional connectivity and building sector institutions.
He said the bank will finance the development of key infrastructure, the supply of ICT equipment and training of staff at Nakonde.
This article originally appeared on ZNBC
Zambia Investor Briefing: February 2024
OVERVIEW
President Hakainde Hichilema addressed the opening session of Cape Town’s Investing in African Mining Indaba earlier this month. His speech emphasised Zambia’s message of “Invest with Confidence” and highlighted recent investments in the country totalling over $4 billion in the past two years. Hichilema also outlined his government’s work with local and international partners in boosting Zambia’s energy and transport infrastructure as he called for investment partnerships to “power this new, green African future”.
KoBold Metals, a mining consortium backed by tech giants Bill Gates and Jeff Bezos, has announced its discovery of a vast copper deposit in Zambia. The California-based startup claims its Mingomba site, in the northern Copperbelt province, is the country’s largest copper deposit in a century.
President Hakainde Hichilema, together with Senior Advisor to President Biden Amos Hochstein and President of the Africa Finance Corporation (AFC) Samaila Zubairu, convened an investment forum for the Lobito Corridor project in Zambia. The Partnership for Global Infrastructure and Investment (PGI) Lobito Corridor Private Sector Investor Forum in Lusaka brought together over 250 government and industry leaders from Zambia, Angola, the DRC, the EU and the US, as well as international investors.
The Zambian Kwacha is Africa’s best-performing currency in 2024 when compared to the US dollar. The currency is on its longest winning streak in a year, largely because of President Hakainde Hichilema’s government’s decision to increase interest rates and mandate that the central bank retain money in the reserve.
German company 7YRDS Group is set to invest $100 million in two solar projects in Kafue and Sesheke, with a total expected output of 100MW. Operations will commence in 2025 and are expected to create around 1,000 jobs. President Hichilema praised the investment and emphasised his government’s commitment to collaboration with international partners to strengthen Zambia’s energy sector.
In a positive development in the ongoing efforts to restructure Zambia’s debt, Hichilema has announced that China and India – the last two countries that had been yet to sign as official creditors – have signed agreements to restructure their holdings of Zambian debt. Attention now turns to private creditors. Finance Minister Situmbuko Musokotwane had recently expressed optimism that the restructuring would be completed in the first half of this year.
A CLOSER LOOK
Investing in African Mining Indaba 2024
President Hakainde Hichilema addressed the opening session of Cape Town’s Investing in African Mining Indaba earlier this month. His speech emphasised Zambia’s message of “Invest with Confidence” and highlighted recent investments in the country totalling over $4 billion in the past two years. Hichilema also outlined his government’s work with local and international partners in boosting Zambia’s energy and transport infrastructure as he called for investment partnerships to “power this new, green African future”.
First Quantum Minerals (FQM) pledged its support for the president’s vision for the future of Zambian mining in a talk given by the company’s Lead of Infrastructure Development, Jed Goldstein, in which he stressed FQM’s “commitment to Zambia”. The government’s efforts also garnered praise from Anglo American CEO Duncan Wanblad, who said Zambia “is doing a really good job of making mining investable in that country”.
Mining Developments
KoBold Metals, a mining consortium backed by tech giants Bill Gates and Jeff Bezos, has announced its discovery of a vast copper deposit in Zambia. The California-based startup claims its Mingomba site, in the northern Copperbelt province, is the country’s largest copper deposit in a century. KoBold’s founder and president Josh Goldman told the Financial Times: “We now know that Mingomba will be one of the very highest grade large copper mines when put into production”, comparing it to the Kamoa-Kakula mine in the DRC in scale and grade.
The startup deploys artificial intelligence in its exploration for minerals, including copper, cobalt, nickel and lithium. KoBold’s plans to build a $2 billion mine at Mingomba are set to be fast-tracked in the rush to meet demand for critical metals as part of the green energy transition. Goldman told Reuters the company is “receptive to conversations about all kinds of different partnerships” in this regard. If successful, the project will be instrumental in meeting Hichilema’s aim to treble Zambia’s copper output to 3 million tonnes by 2032.
KoBold is also set to expand its presence in Zambia after signing a deal with Midnight Sun Mining to explore its Dumbwa Target in Solwezi.
In other mining news, Anglo American is in the early stages of exploring for copper and cobalt in the North-Western Province, with its CEO Duncan Wanblad announcing that Zambia’s mining sector is “on track for renewed activity”.
Rail Development Projects
President Hakainde Hichilema, together with Senior Advisor to President Biden Amos Hochstein and President of the Africa Finance Corporation (AFC) Samaila Zubairu, convened an investment forum for the Lobito Corridor project in Zambia. The Partnership for Global Infrastructure and Investment (PGI) Lobito Corridor Private Sector Investor Forum in Lusaka brought together over 250 government and industry leaders from Zambia, Angola, the DRC, the EU and the US, as well as international investors, in order to “unlock the enormous potential of this region”. Various commitments were announced during the PGI Forum, including a $250 million investment to support the project from the US International Development Finance Corporation.
Speaking at the forum, President Hichilema described the Lobito Corridor as a “once in a lifetime” opportunity for Zambia’s development. It will significantly reduce transport time for the country’s mining output, including copper and cobalt, to reach the coast. The rail line has its first user lined up after Canada’s Ivanhoe Mines signed a deal with commodities trader Trafigura Group to transport copper on the line from the DRC to Lobito.
Also this month, China announced plans for a $1 billion project restoring a rail line connecting Zambia’s copperbelt region with the Tanzanian port of Dar es Salaam. This follows reports from November 2023 that the Chinese government had asked China Railway Construction Corp., a state-owned company, to negotiate a concession to revive and operate the Tazara railway. The line has fallen into disrepair in past decades but originally had a capacity of about five million tonnes per year. Hichilema has said Zambia is on track to conclude the deal by September.
OTHER NEWS
How five southern African countries worked to put KAZA on the map (Forbes, 07.02.24)
Canadian government hails Zambia as attractive mining investment destination (Lusaka Times, 13.02.24)
Zambia’s Proflight adds Cape Town to its list (eNCA, 22.02.24)
US bets on $2.3 billion African railway to help deliver EV revolution (Bloomberg, 21.02.24)
Modern mining: A sustainability balancing act (African Business, 26.02.24)
UPCOMING EVENTS
Bonds, Loans & ESG Capital Markets Africa 2024 - Cape Town, SA, 05-06.03.24
Global Trade Review Africa 2024 - Cape Town, SA, 07-08.03.24
Global Impact Summit: Sustainable Media and Publishing for Sustainable Economic Development - Livingstone, Zambia 07-09.03.24
Fintech Spotlight: Moving Africa’s Money (Invest Africa) London, UK - 21.03.24
Halfway through HH’s presidency, Zambia’s future looks brighter than ever
Having passed the halfway point of his first term, President Hakainde Hichilema has already delivered a great deal of positive change for Zambia.
His leadership has brought tangible progress in empowering local communities - most notably through his Education for All scheme and the successful expansion of the Constituency Development Fund (CDF) – as well as making great strides in strengthening the economy by increasing investor confidence and working towards a debt restructuring agreement. His achievements mark a pivotal moment for Zambia, where democracy, economic growth, and social progress intersect to create a bright future.
To mark this important milestone in HH’s presidency, Zambia Is Back counts down the president’s most impactful policies and reforms.
1. Delivering free education
Hichilema's pivotal achievement of free education to all citizens of schooling age has ushered in a transformative era for Zambia. Since 10 January 2022, when the UPND’s free education programme began, nearly 2.3 million children have had their access to education restored.
Hichilema’s unwavering commitment to education was reflected in the inaugural national budget, where a 10.4% allocation - the largest in five years - was earmarked for the sector. In 2023 the allocation rose to 13.9% in order to fortify the education system's foundation.
The government's initiatives extend beyond budget allocations. Grants for primary and secondary schools have doubled, accompanied by the recruitment of 30,000 teachers and plans for the construction of over 100 new secondary schools. This surge in educational infrastructure not only creates immediate employment opportunities but also promises an educated and well-balanced future workforce.
Hichilema's vision includes further reducing teacher-to-student ratios in the coming years, so that every child will get the academic attention they need. The administration is well on its way to providing a desk for each child. This feat has been made possible through the substantial expansion of the Constituency Development Fund (CDF), enabling educational equity across the provinces.
With so many children now able to access a full education, Hichilema's presidency signifies a watershed moment in Zambia's educational landscape. Access to quality education is no longer a privilege but a fundamental right for all citizens, and the groundwork is laid for a more prosperous and equal society.
2. Boosting private sector investment
Hichilema is steering economic recovery by restoring the confidence of business and industry in Zambia and thereby encouraging investment in the country. In the period since he took office, international investment has risen from $3.31 billion to at least $37 billion.
A key area of investor confidence is mining: with a goal to treble the country’s copper output by three million tonnes per year by 2032, Hichilema is working to cement Zambia’s position as a major player in the global mining industry. The country has some of the highest-grade copper in the world, and the metal is key to the green energy transition.
Earlier this month, US-based mineral exploration company KoBold Metals found the largest copper deposit the country has seen in a century at its Mingomba site and intends to expedite its $2 billion investment. Hichilema has also struck a deal with Canadian-based First Quantum Minerals (FQM) in the form of a $1.25 billion investment in the expansion of its Kansanshi mine, and a further $100 million to complete the Enterprise nickel mine, which will be one of the largest nickel mines in the world. Meanwhile, Barrick Gold has fast-tracked its $2 billion expansion of Lumwana copper mine.
Investments are creating thousands of jobs for Zambians: since August 2021 over 20,000 jobs have been actualised and a further 112,000 have been committed. The expansion of Kansanshi mine alone will create another 1,800 jobs this year.
Hichilema has also been successful in encouraging foreign investment in the renewable energy sector, commitments to which have increased eightfold from $2 billion in 2021 to $16.1 billion in 2023. This is succeeding in propelling Zambia to the forefront of the green energy transition. Recent developments in this area include the partnership Hichilema agreed with the British government covering clean energy and critical mineral supply worth more than $3.7 billion. Green investment is also enabling the diversification of Zambia’s own energy sources, such as the recently announced project by German-owned 7YRDS to build two large solar projects.
The president’s unwavering dedication to Zambia's economic revival is evident through his strategic approach to foreign investment. Under his leadership, the private sector is experiencing unprecedented growth, fuelling job creation and working towards economic prosperity.
3. Empowering communities through CDF
President Hichilema’s administration has taken a groundbreaking step towards regional development and community empowerment through the significant expansion of the Constituency Development Fund (CDF) in the 2022 budget. Allocated funds have increased from just K1.6 million in former President Edgar Lungu’s budget to a substantial K25.7 million in Hichilema’s first budget and a further K28.3 million in his second.
This large increase gives greater power to communities to foster grassroots change. The new approach grants autonomy to each constituency, allowing it to directly address its most pressing needs in areas such as healthcare, education, vocational training, infrastructure, waste management, and agriculture. It is through investment in local communities that Zambians will gain skills and support to explore their careers and contribute to the economy.
The CDF is delivering lifechanging infrastructure development, such as at Chipata level-one hospital in Lusaka, where CDF funding has increased staff levels and provided up-to-date equipment, improving the quality of medical care for citizens.
This bottom-up approach to development promises to actively address issues of corruption and lack of investment in rural Zambia, fostering a more inclusive and prosperous nation. In essence, the expanded CDF signifies a shift towards people-powered progress, putting the tools for economic advancement directly in the hands of those who need it most.
4. Strengthening democracy and tackling corruption
During his tenure so far, Hichilema has strengthened Zambian democracy by encouraging freedom of expression, legislating for government transparency, and clamping down on corruption.
Hichilema has achieved a significant breakthrough for media freedom in Zambia by enacting the long-awaited Access to Information (ATI) Act after years of unfulfilled promises from previous administrations. The act enables citizens to request information from public bodies, ensuring that government processes are open and accessible to all - including those who are unable to read.
This achievement stands as a stark departure from the oppressive environment cultivated under the previous administration of President Lungu. The closure of The Post, a vital independent newspaper, served as a glaring example of the suppression tactics employed by his government. However, in 2022, a court deemed the closure illegal, and Hichilema's administration went further by repealing the law criminalising defamation of the president. Removing this act from the statute books, alongside scrapping the death penalty and plans to reform the Public Order Act, signifies a new era for freedom of expression and assembly in Zambia.
Hichilema’s dedication to transparency extends beyond the realm of media freedom. He has bolstered institutions such as the Financial Intelligence Unit (FIU) and Anti-Corruption Commission (ACC), underscoring his determination to combat corruption and uphold principles of fair governance.
Recently, Hichilema has overseen the sentencing of the former Deputy Inspector General, Charity Katanga, to three years in prison for purchasing property with illegal funds. In a country where state capture has been the modus operandi of previous presidents, Hichilema’s government is showing that corruption has no place in modern Zambia.
The UPND government represents a turning point in Zambia's trajectory, where the fundamental rights of citizens are safeguarded, and government accountability is prioritised. Through legislative reforms, the president has demonstrated his unwavering belief in the principles of democracy and freedom of expression for all, irrespective of political affiliations.
5. Restructuring historic debts
Since taking office, President Hichilema has been working tirelessly to complete the mammoth task of restructuring Zambia’s $13 billion external debt: a weighty burden he had inherited from his predecessor. In a very positive recent development, Hichilema announced on 26 February that China and India – the last two countries that had been yet to sign as official creditors – have signed agreements to restructure their holdings of the debt.
This is very welcome news and follows several months of protected wrangling between official and private creditors. In 2022, Hichilema managed to secure a provisional deal with official creditors for $6.3 billion and a separate deal with private bondholders for $3 billion, both incredible feats of negotiation which would greatly ease the country’s financial burdens. However, progress has slowed down after official creditors complained that their terms were not as favourable as those received by private lenders.
Nevertheless, things are moving in the right direction. Finance Minister Situmbeko Musokotwane expressed optimism in February that the restructuring would be completed in the first half of this year.
Hichilema is walking through uncharted territory, fixing the corruption and carelessness of his predecessors. Although the debt restructuring is still ongoing, the current outlook looks positive, with strides taken to get Zambia back on track and bring economic stability to the nation.
Zambian Kwacha is Africa’s Best Performing Currency in 2024
This year, the Zambian Kwacha has outperformed all other African currencies when compared to the US dollar, solidifying its position as the top performer on the continent. The currency is on its longest winning streak in a year, largely because of President Hakainde Hichilema’s government’s decision to increase interest rates and mandate that the central bank retain money in the reserve.
On 5th February, the country increased the minimum reserve ratio for lenders. The interest rates are currently the highest they have been in nearly seven years. By purposefully constricting the flow of funds the Kwacha has climbed in value. This has been further supported by increasing the base interest rate just over a week later.
With the Kwacha strengthening, imports will become cheaper. As a country that relies heavily on exports for a range of necessities including fuel, foodstuffs, fertiliser, and vehicles, this is welcome news. Moreover, Zambian exports will similarly gain in value. These exports include Zambian copper, which accounts for 70% of the continent’s production, as well as gemstones, tobacco, and sugar.
Analysts have warned that the Kwacha’s positive streak—and sustainable growth of the currency—will occur only if the country can secure more international investment, something that is already being promoted across all sectors of Zambia’s economy. In particular, President Hichilema’s improvement in mining policy has attracted billions of dollars worth of international investment to the country, with the policies offering predictability and confidence.
Some optimistic projections see the Kwacha continuing to rise to 22 per dollar. In a note to clients, Mulenga Kawimbe, from the First National Bank of Zambia, stated that the bank believes “a break of the 22.00 level is possible.”
This economic engineering has boosted the Kwacha, breaking its steady decline for 75 consecutive days. Its largest fall occurred between October 16th and February 5th, dropping 21% against the US dollar.
Zambian officials have credited the currency’s fall to hampering international investment because of stalled debt restructuring talks. Since then, Secretary to the Treasury Felix Nkulukusa has assured that Zambia is “on course to reach a new agreement.”
Ivanhoe signs up to be US-backed African rail line’s first user
Ivanhoe Mines Ltd., chaired by billionaire Robert Friedland, and commodities trader Trafigura Group signed deals to transport copper by rail from the Democratic Republic of Congo to neighboring Angola’s port of Lobito, marking the first long-term deal for the railway project that the US government is backing.
Trafigura is part of the consortium that won a 30-year concession to operate the Lobito railroad that could become a key export route for DRC’s fast-growing production of copper and cobalt — both crucial metals for the energy transition. Ivanhoe says the route could drastically cut transport times and lower emissions.
“This is fantastic news for the Congo,” Friedland said in a speech in Cape Town Wednesday. “This brings the mineral rich region of the Congo to world markets. And this kind of infrastructure development is critical for the development of the African continent.”
Mining companies operating in the copper belt that straddles Congo and Zambia have traditionally trucked their metals down to South Africa’s Durban port. This journey can take more than a month. Lobito promises to cut trip times to less than a week, to an Atlantic port that’s closer to the US and European Union. Both powers are backing the project financially, as part of their efforts to counter China’s heavy influence in the region.
The US has committed $250 million to the refurbishment of the line in Angola, and is funding a study to link the railway into Zambia as part of a project that will cost an estimated $1.6 billion. That’s part of an acceleration of US investment in Africa, said Amos Hochstein, senior adviser to US President Joe Biden for energy and investment. It’s also catalyzing private investment, he said.
Infrastructure is emerging as a key investment area for funds including BlackRock Inc., led by Larry Fink.
“We’ve seen a transformation from the financial industry worldwide but especially in the US from some skepticism to a realization that this is the new frontier of investment to enable the kind of supply chains that we are going to need,” Hochstein said in an interview Tuesday. “There’s interest in real investment, and translated from not just Larry Fink talking about it but we’re seeing money being put to action, money being raised for the purpose of infrastructure in low and middle income countries.”
The Lobito Atlantic Railway concessionaires, which also include Mota-Engil and Vecturis, will ramp up the line’s export capacity to one million tons yearly by the end of the decade, Trafigura said in a statement Wednesday. Trafigura’s export capacity allocation on the line will be 450,000 tons from 2025.
Ivanhoe’s massive Kamoa-Kakula copper mine, jointly owned with Zijin Mining, has agreed an allocation of between 120,000 tons and 240,000 tons.
This article originally appeared on Bloomberg
Bill Gates-backed mining company discovers vast Zambian copper deposit
A mining start-up backed by Bill Gates and Jeff Bezos says it has discovered a vast copper deposit in Zambia, offering a potential boost to the west’s efforts to cut its reliance on China for metals that are vital to decarbonise everything from cars to power transmission systems.
KoBold Metals said on Monday that it had found Zambia’s largest copper deposit in a century, estimating that the Mingomba site in the northern Copperbelt province will become one of the world’s top three high-grade copper mines.
The discovery comes as the US government embarks on a charm offensive and infrastructure push in Africa in an effort to compete with China’s control over minerals that are critical for defence, renewable power and electric vehicles. The US government is backing the development of the Lobito railway, a line to transport metals in the region connecting the Democratic Republic of Congo and Zambia to the Lobito port in Angola.
While demand for copper is forecast to soar as countries set up efforts to electrify their transportation systems and pivot to renewable energy, the world’s largest mining companies are struggling to find high-quality assets.
Copper, which is widely used in construction and industry, is expected to undergo a boom in demand as it is heavily used in power transmission lines, electric vehicles and wind turbines.
“We’ve spent a year with the largest fleet of drilling rigs in Southern Africa,” Josh Goldman, founder and president of KoBold Metals, told the Financial Times. “We now know that Mingomba will be one of the very highest grade large copper mines when put into production and it’s very much like Kakula in scale and in grade.”
KoBold expects Mingomba will rival output at the deposit that is part of US billionaire Robert Friedland’s giant Kamoa-Kakula project in the Democratic Republic of Congo.
Backed by Breakthrough Energy Ventures, a climate change investment vehicle founded by Bill Gates, KoBold deploys artificial intelligence to scrape historical geological archives — including old PDFs and even maps hand painted on linen — and uses algorithms to help decide where to explore for minerals.
The California-based company is valued at $1.15bn, and also counts BHP, the world’s largest mining group, and oil major Equinor, as investors.
KoBold aims to start producing copper at the $2bn underground mine by the early 2030s.
The project is yet to conduct a pre-feasibility study, which provides early estimates of project costs and how economically the metal can be extracted.
If successful, the project would play a big role in meeting Zambian president Hakainde Hichilema’s ambition to more than treble the country’s copper output to 3mn tonnes by 2032, and help the nation dig its way out of debt.
Spending by the world’s biggest mining companies on copper exploration was small relative to volume of the metals the world was expected to need, Goldman said. Exploration companies, meanwhile, were struggling to raise capital because of interest rate hikes, he added.
“Exploration is where babies come from. You can help babies grow but you’ve got to get the birth rate up,” said Goldman. “That’s the hardest part: how do you find things in the first place.”
Goldman added that the company was evaluating a public listing in the next three or four years.
This article originally appeared on Financial Times
Zambia Investor Briefing: January 2024
OVERVIEW
At the end of December, Zambia’s Copperbelt Energy Corporation Plc (CEC) announced the successful registration of its $200 million Green Bond with the Securities and Exchange Commission, the first in Zambia. CEC Managing Director Owen Silavwe said the bond’s proceeds would “accelerate the actualisation of our ambitions to generate at least 200MW of renewable energy and specifically solar energy with possible storage implementation”.
Barrick Gold’s chief executive Mark Bristow met with President Hakainde Hichilema to inform him the expansion of Barrick’s Lumwana copper mine is being accelerated, with first production now scheduled for 2028. Last year the company had pledged $2 billion in a bid to increase copper production to a projected 240,000 tonnes per year and extend the life of the mine to 2060.
SG Global Renewables Centre (GRC), a Scotland-based hub for facilitating knowledge exchange between international development partner countries and the Scottish renewables sector, has formalised a partnership with the Zambia Renewable Energy Association (ZARENA), as well as in Malawi and Rwanda. GRC offers networking, shared learning, and resources to enable increased deployment of sustainable energy in its partner countries. Chairman of ZARENA Jospeh Mutale said the initiative would support the association’s objective of “delivering a transformative impact on the roll out of sustainable renewable energy solutions in Zambia”.
Zambia’s Transport and Logistics Ministry has announced plans to build a new rail connection linking Mpulungu harbour on Lake Tanganyika to a line that runs to Tanzania. The proposed 192km line will run through northern Zambia to the lake’s southernmost harbour and will boost trade in the region. The Transport and Logistics Ministry has asked companies to express their interest in financing and building the concession.
Minister of Science and Technology Felix Mutati has announced plans to establish Community Digital Transformation Centres (CDTCs) across the country in order to enhance Zambia’s digital capabilities and empower citizens through training and online service delivery. The plans have been developed on the back of Zambia’s recent partnership with Starlink, SpaceX’s satellite internet service, which is providing lawmakers with Starlink kits in their constituencies and enables internet connectivity even in remote areas.
Zambia’s “investment promotion ambassadors” visited Davos for the World Economic Forum annual meeting. The delegation included Finance and National Planning Minister Dr Situmbeko Musokotwane; Commerce, Trade and Industry Minister Chipoka Mulenga; and Albert Halwampa, Director General of the Zambia Development Agency (ZDA). Musokotwane said regarding the trip, “We are here to make diligent efforts to attract the best available global investment prospects in the green economy, mining, agriculture, tourism, value-addition, human development, and other growth boosting ventures, to our beloved country Zambia”.
Zambia Is Back’s Choolwe Chibomba sat down to interview Monica Musonda, CEO of Java Foods. They covered topics such as her business journey, the role of women in Zambia’s economic development, and why now is the time to invest in Zambian businesses.
President Hichilema is due to deliver a keynote address at Invest in African Mining Indaba 2024 in Cape Town next week. He is expected to discuss the future of mining in Zambia, outlining his plans to expand copper production and position the country as a major player in the global mining industry. He will also address efforts for Zambian mining to expand into a wider array of critical minerals, including cobalt, nickel, and manganese. The president’s speech will also explore the potential for collaboration between the government, industry stakeholders, and investors.
A CLOSER LOOK
Copperbelt Energy Corporation registers Zambia’s First $200 Million Green Bond
At the end of December, the Copperbelt Energy Corporation Plc (CEC) announced the successful registration of its $200 million Green Bond with the Securities and Exchange Commission, the first in the country. The company, which is based in Zambia, provides power infrastructure solutions. CEC Managing Director Owen Silavwe said the bond’s proceeds would “accelerate the actualisation of our ambitions to generate at least 200MW of renewable energy and specifically solar energy with possible storage implementation”.
The bond aligns with Zambia’s Green Growth strategy, devised by Hichilema’s government. The strategy aims to decarbonise the economy by developing resource-efficient and climate-resilient infrastructure. The Minister of Green Economy and Environment Collins Nzovu spoke at COP28 about the government’s establishment of two regulatory frameworks to aid in this endeavour: the Green Bonds Framework issued by the Securities and Exchange Commission and the Green Loans Framework issued by the Bank of Zambia.
Proceeds from the bond will finance the development of solar generation projects in Zambia within the CEC Group through CEC Renewables, an investment vehicle designed to realise renewable energy development. According to a statement issued by CEC, the bond is “a first for Zambia’s capital markets and is expected to attract more green finance in the country”. CEC’s announcement highlights the increasing importance of green bonds in financing clean energy infrastructure, and the role played by capital markets within this.
Investors in the Green Bond include Emerging Africa Investment Fund, ABSA Bank, Atlas Mara Bank Zambia, and the African Local Currency Bond (ALCB) Fund.
OTHER NEWS
IMF releases $187 million Zambia payout, says restructuring proposal being revised (Reuters, 20.12.23)
Albert Muchanga: New transport corridors will be ‘catalyst for AfCFTA success’ (The Africa Report, 04.01.24)
Zambia aims to resolve debt revamp standoff within three months (Bloomberg, 04.01.24)
Zambia: $10m company proves small farms can be big business (How We Made It In Africa, 09.01.24)
WEF Davos 2024: How Africa can achieve commodity-led industrialisation (African Business, 17.01.24)
India to send industry delegation for copper mining opportunities in Zambia (Indian Express, 22.01.24)
How could artificial intelligence help pregnant women in Zambia? (Forbes, 28.01.24)
UPCOMING EVENTS
Cape Town, SA:
Investing in African Mining Indaba 05-08.02.24
121 Mining Investment 05-06.02.14
Invest Africa Mining Series 05-07.02.24
Nairobi, Kenya:
Africa Tech Summit 14-15.02.24
Sankalp Africa Summit 2024 28-29.02.24
Other:
SAVCA Private Equity Conference 28-29.02.24, Stellenbosch, South Africa
Pension Funds & Alternative Investments Africa Conference 28-29.02.24, Mauritius
President Hichilema to Deliver Keynote at Mining Indaba 2024
Mining Indaba is honoured to announce that Zambia’s President Hakainde Hichilema will deliver a keynote address in 2024
Zambia’s President Hakainde Hichilema is set to deliver a keynote address at Mining Indaba 2024, demonstrating his unwavering dedication to revitalising his country’s mining sector and delivering jobs and economic growth to the people of Zambia.
This will be Hichilema’s second appearance at Mining Indaba as President, having delivered a keynote address in May 2022, shortly after his landslide election victory in 2021.
Since this historic election, President Hichilema has made quick progress towards achieving his objectives, implementing several measures to revitalise the mining sector in Zambia. Already the seventh largest copper producer in the world, Hichilema has set out to advance Zambia’s ranking with an ambitious goal of expanding copper production from 800,000 tonnes per year currently to around 3 million tonnes of copper by 2030.
Under Hichilema’s leadership, the Government of Zambia has reviewed the mining tax framework, ensuring a stable and competitive taxation system while eliminating double taxation. Furthermore, President Hichilema has personally spearheaded efforts to attract investment along the mining value chain, exemplified by the signing of a memorandum of understanding with the Democratic Republic of Congo to build a regional value chain for electric vehicle batteries. These initiatives have already yielded positive results, with major mining groups reinvesting in Zambia and the country's copper opportunities gaining renewed interest from global players.
During his keynote at Investing in African Mining Indaba, the President is expected to delve into the future of mining in Zambia, outlining his plans to expand copper production and position the country as a major player in the global mining industry. He will also address efforts for Zambian mining to expand into a wider array of critical minerals including cobalt, nickel and manganese. Furthermore, Hichilema’s speech will explore the potential for collaboration between the government, industry stakeholders, and investors, highlighting the need for partnerships to drive innovation and maximise the sector's socio-economic benefits.
Just two years into Hichilema’s presidency, there have already been numerous positive developments in Zambia’s mining industry. Since 2019, Barrick’s Lumwana mine has contributed nearly US$3 billion in taxes, royalties, and local employment. In October 2023, the company made clear its support for the Zambian economy by announcing it will invest almost $2 billion to expand Lumwana and increase its annual production to an estimated 240,000 tonnes of copper. This will elevate a once unprofitable operation into one of the world’s foremost copper production facilities.
Similarly, a $100 million investment by First Quantum Minerals (FQM) has successfully brought the Enterprise Nickel Mine – Africa’s largest nickel producer – online. Meanwhile, FQM’s $1.25 billion expansion to its Kanshansi Copper Mine – announced at the Investing in African Mining Indaba 2022 – is expected to create nearly 2,000 jobs in Zambia.
Hichilema’s visionary and steadfast leadership has also encouraged new players to make their mark in Zambia. California-based Kobold Metals, which is backed by tech titans including Bill Gates and Jeff Bezos, is working to start producing copper and cobalt at its project in Zambia. The company has so far invested $150 million to accelerate its search for high-quality metal deposits located in the famous Copperbelt.
Other newcomers include Abu Dhabi’s International Resources, who in December 2023 announced a $1.1 billion investment in Mopani Copper Mines, funding the mine’s expansion plan and increasing copper production to 200,000 tons in the next three years.
President Hichilema’s leadership has galvanised not just the mining industry but also related industries that provide much needed infrastructure and support to the extractives sector. On 26 October, his government signed a memorandum of understanding with the United States and European Union to develop the Lobito Corridor and build a new Zambia-Lobito rail line. This includes a $ 250 million investment by the United States and will deliver an enormous boost to intra-regional trade, as well as stimulating growth and job creation within Zambia.
Mining Indaba 2024's theme is 'Embracing the power of positive disruption: A bold new future for African Mining'. Zambia’s re-emergence as a top investment destination of choice for mining investors demonstrates that positive disruption can deliver positive results and Mining Indaba is excited to provide opportunities to understand the country’s successes and processes for achieving this.
BackChat Season 2 Episode 5: Thebe Investment Management CEO Mwiya Musokotwane
Our guest this week has been mentioned in the Forbes 30 under 30 as well as being part of the Choiseul 200 Leading Economic Leaders list! Tune in as Choolwe catches up with Mwiya Musokotwane of Thebe Investment Management as they discuss all things infrastructure development and the current investment landscape in the country, including the role that President Hakainde Hichilema has played.
BackChat Season 2 Ep. 5: Mwiya Musokotwane, CEO of Thebe Investment Management
ZIB’s guest this week has been mentioned in the Forbes 30 under 30 as well as being part of the Choiseul 200 Leading Economic Leaders list! Tune in as Choolwe catches up with Mwiya Musokotwane of Thebe Investment Management as they discuss all things infrastructure development and the current investment landscape in the country, including the role that President Hakainde Hichilema has played.
2023 In Review: Zambia's Economic Revitalisation
2023 has been a bumper year for Zambian investment, with an additional US$ 40 billion ploughed into 379 investment projects throughout the year. This represents a 300% increase on the previous year’s figure of US$8.6 billion.
Albert Halwampa, Director General of the Zambia Development Agency, attributes this transformational confidence in Zambia’s economy to the discerning policies implemented by President Hakainde Hichilema.
Speaking to ZNBC 1, Halwampa said there was a “new sheriff in town”, which explains Zambia's attractiveness to global investors. The nation has now become a hub for international business ventures, he explained, and the influx of capital has soared to new heights, signalling a surge in global interest and confidence in Zambia's economic potential.
In Halwampa's words, "We've never witnessed this level of economic activity in Zambia."
Of the monumental US$40 billion investment, a considerable US$2 billion has already been deployed, with Halwampa assuring stakeholders that projects are advancing through various stages of implementation.
He outlined that these strategic investments will soon yield substantial benefits, not only for the investors but crucially also for the citizens of Zambia.
Over the past year Halwampa, along with his dedicated ZDA team, travelled globally, identifying and evaluating diverse business opportunities for Zambia.
From cutting-edge artificial intelligence enterprises in America to the nuanced realm of almond cultivation in Italy, Halwampa has helped position Zambia as an ideal business environment across a wide array of sectors.
This dedicated effort underscores ZDA’s commitment to fostering a resilient business ecosystem that extends beyond the attraction of investment, seeking to diversify and fortify the nation's economic foundations.
As these investments are actualised in 2024 and beyond, it is clear that Zambia is well positioned to solidify its standing as a rising star of southern Africa’s rapid economic development.
What to stay up to date with Zambian investment news? Sign up to our newsletter by clicking here.
BackChat Season 2 Episode 4: Java Foods CEO Monica Musonda
Zambia Is Back spokesperson Choolwe Chibomba speaks to Monica Musonda, CEO of Java Foods, about her business journey, the role of women in Zambia's economic development, and why now is the time to invest in Zambian businesses.
First Quantum agrees with Zambian firm to fast-track copper project
LUSAKA, Dec 4 (Reuters) - Canada's First Quantum Minerals (FM.TO) and a Zambian mining company have signed an agreement to fast-track the development of a copper project in Africa's second-biggest producer of the metal, the companies said on Monday.
Zambia has ambitions to triple its copper output and has reviewed its tax policy to increase mining exploration and output.
First Quantum is already a major miner in the southern African country.
ts agreement with Zambia's Mimosa Resources envisages mining at the Fishtie copper project starting from 2026, ramping up to maximum production of 30,000 metric tons of copper a year by the end of the decade, First Quantum and Mimosa Resources said in a joint statement.
First Quantum reiterated it thought the investment climate in Zambia had improved.
Mimosa Resources is expected to lead the raising of a total investment of $200 million for the project.
Zambia Investor Briefing: December 2023
OVERVIEW
• Canadian mining giant First Quantum Minerals (FQM) has signed a deal with Zambia’s Mimosa Resources to advance the development of the Fishtie copper project in Central Province. The deal – a revised version of the Kashime Development Agreement, first announced in 2012 - will see Mimosa aim to raise the $200 million required for the project’s development. Production is slated to begin in 2026 and is expected to extract 30,000 tons of metal per year by the end of the decade. FQM’s country manger Godwin Beene said regarding the deal: “We are determined that this resource should be developed now that the investment climate in Zambia has improved”.
• During his attendance at COP28 UAE, President Hakainde Hichilema used the international platform to engage with global leaders on climate change and global development. He presented a keynote address, engaged with numerous premiers and delegates, and participated in various panels. The Zambian president gave a Keynote Intervention at the ‘Leaders’ Event on Carbon Markets’ hosted by the EU alongside EU President Ursula von der Leyen, Prime Minister of Spain Pedro Sánchez, and Kristalina Georgieva of the IMF. In his address, Hichilema detailed Zambia’s national climate adaptation policy, promoting carbon market development. He also stressed the need to actively engage with rural communities regarding carbon projects.
• During his visit to Zambia, the Bank of China’s vice-president Lin Jingzhen announced plans to promote the use of renminbi (RMB) in the country. He said: “We will earnestly act upon our responsibility and leverage our role in Zambia to provide holistic services and products related to RMB and to promote the use of RMB in bilateral trade and economic activities”. Hichilema said the Bank of China “remains committed to supporting ongoing projects” in Zambia.
• Hichilema met with France’s Secretary of State in charge of Development, La Francophonie and International Partnerships Chrysoula Zacharopoulou during her trip to Zambia. According to the president, the pair discussed the country’s goal to connect to important of trade corridors in connecting to the Atlantic and Indian Oceans. The two also signed Declarations of Intent covering a number of areas.
• Zambia Is Back’s Choolwe Chibomba sat down in an interview with British High Commissioner to Zambia Nicholas Woolley. They covered topics such as the UK’s work in supporting investment into Zambia, Zambia’s renewable energy sector, and expectations for the UK-African Investment Summit 2024. Chibomba also met with the German Ambassador Anne Wagner-Mitchell. During the interview the pair discussed German investment in Zambia, as well as the ways in which the two countries can work together to mitigate climate challenges.
• At Zambia’s first Information and Communications Technology, Postal and Courier Services awards, Minister of Science and Technology Felix Mutati announced that 4G internet is being set as standard across the country. As part of this effort to enhance Zambia’s connectivity, 2G and 3G will be eliminated.
• US President Joe Biden hosted Angola’s President João Lourenço to discuss the US contributing $1 billion to the Lobito Corridor. The Corridor is a trans-African railway line connecting Zambia and the DRC to regional and global markets through the port of Lobito on Angola’s coast. Once completed, it will offer the shortest route to transport Zambia’s exports such as critical minerals to the coast and will also greatly benefit the region’s import economy.
A CLOSER LOOK
Hichilema Attends COP28 in the UAE
During his attendance at the COP28 climate summit, President Hakainde Hichilema used the international platform to engage with global leaders on climate change and global development. He presented a keynote address, engaged with numerous premiers and delegates, and participated in various panels.
The Zambian president gave a Keynote Intervention at the ‘Leaders’ Event on Carbon Markets’ hosted by the EU alongside President of the EU Ursula von der Leyen, Prime Minister of Spain Pedro Sánchez, and Kristalina Georgieva of the IMF. In his address, Hichilema detailed Zambia’s national climate adaptation policy, promoting carbon market development. He also stressed the need to actively engage with rural communities regarding carbon projects.
In efforts to continue to strengthen Zambia’s economic diplomacy with key global players, the Zambian president held numerous bilateral meetings during his time at COP, including with French President Emmanual Macron. He also held bilateral meetings with Ding Xuexiang, China’s Vice Premier. The talks were focused on strengthening the ‘all-weather friendship’ of the two countries. In a statement posted to his Facebook page, Hichilema said: “We remain committed to building on our bilateral relations for the benefit of our two countries and peoples”.
Hichilema’s other meetings of note, held on the margins of COP, include his engagement with Antonio Guterres, UN Secretary-General. He also met with Ahunna Eziakonwa, Assistant Secretary General of the United National Development Programme, with whom he explored the idea of Zambia hosting a regional technology hub and implementing a carbon strategy framework.
OTHER NEWS
AFC leads on critical Lobito rail link project (African Business, 30.11.23)
The New Guard: South Africa, Angola, Zambia (Africa Intelligence, 06.12.23)
‘Gem in the rough’: A look at Zambia’s ever-growing emerald industry (Forbes Africa 12.12.23)
Billionaire-backed KoBold Metals widens lithium hunt across four continents (Reuters, 14.12.23)
Jubilee Metals raises $16.6m to fund Zambia copper recovery (Mining Technology, 18.12.23)
Opinion: The three ‘geos’ shine against gloomy horizon (FDi Intelligence, 19.12.23)