Economics Association of Zambia President Lubinda Habaazoka has predicated that Zambia’s economic situation is expected to improve in 2020.

Dr. Habaazoka said this is especially so due to favorable rainfall patterns and the expected normalization of water levels needed for electricity generation in Zambia.

He said the new hydroelectric power plants that are expected to be added to the grid this year will definitely reduce pressure in the energy sector.

Dr. Habaazoka said it is expected that the kwacha might still be under pressure threatening levels of inflation.

He said metal prices are expected to increase triggering increased interest in the mining sector by investors.

“It is advised that citizens take a keen interest in engaging in artisanal mining to ensure that wealth remains in Zambia and benefits the Zambia people. It is important to note that participants have adjusted their economic behavior given the current economic situation both domestically and globally. This means the wait and see approach will be abandoned in favor of the business must begin approach,” Dr Habaazoka stated.

“With a gold value chain coming up well, we expect full implementation by ZCCM IH and Bank of Zambia to boast lender morale. It is expected that KCM will finally be moved to more independent managers.”

He added, “Looking at increased interest for Zambia especially from non-traditional trading partners, it is expected a proper debt amortization plan will organically fall in ensuring that Zambia continues meeting its obligations as the fall due.”

Dr Habaazoka also expects that Zambia will face ideological pressures that will need a strong national sense of belonging to overcome.

“Overall, with a boom in the electrical car industry, improvements in the USA economy, expected increased raw material consumption appetite and Brexit, major global economic players will have their eyes on Africa and Zambia has a comparative advantage with only Rwanda posing competition. Very important to note that whilst other market participants might have a pessimistic approach, Asian and Middle East players remain bullish for Zambia.”

Zambia Revenue Authority Commissioner General Kingsley Chanda has said tax authorities in Africa need to collaborate and share information to ease the identification of tax evasion attempts.

He said at the on-going Africa Mining Indaba on Tuesday that ZRA is also facing challenges with auditing some companies as some put records in a foreign language.

“In our country, we even have another challenge where a certain part of our business community even keeps records in different languages. I won’t mention here, where when you go to the audit, you find that the records are just some characters. So that, apart from just the technology itself, even the way taxpayers keep their records, if it’s not standardized, it becomes a serious problem but one way of standardizing that we have done in our country is to legislate the kind of accounting packages that you should have for tax purposes,” Mr. Chanda said.

He said tax authorities in most African countries do not have reliable ICT systems.

“So auditing mining companies or ascertaining their profitability becomes a challenge and that is why you have seen countries in Africa moving towards simpler tax systems like focusing on mineral royalty taxes which are based on production. We have had countries like even ours where we have even made mineral royalty tax non-deductible so that when its paid, it is the final tax. But more crucially it’s for tax authorities and their governments to invest a lot in ICT systems for tax authorities because that’s the only way we are going to be able to deal with some of these challenges,” Mr. Chanda said.

The enmity between Vedanta Resources and the Zambian government shows no signs of easing after Mines Minister Richard Musukwa, labelled the country’s mining sector a victim of criminal activity.

“Zambia is a victim and it needs support,” said Mr. Musukwa in a speech to delegates at the Investing in African Mining conference in Cape Town on February 5.

“We deserve African and international support to make sure Vedanta pays the price.”

Mr. Musukwa was referring to a dispute with Vedanta dating from May last year in which the state-owned copper company, ZCCM-IH, sought the liquidation of Konkola Copper Mines (KCM). ZCCM-IH has a 20% stake in KCM, which has productive capacity of about 100,000 tons of copper. Vedanta is the majority shareholder in KCM with an 80% stake.

ZCCM-IH argued at the time of starting liquidation proceedings that Vedanta had failed to deliver on its investment promises – a theme Musukwa ran with at the conference. He told delegates: “Investors must follow their [Vedanta’s] commitments.

“Vedanta Resources pledged $398m in a project and did not bring that. It pledged another $500m – it did not bring that. It pledged another $250m – they did not bring that money,” he said.

In an earlier interview with Miningmx, Vedanta CEO, Srinivasan Venkatakrishnan, said the attempt to wind-up KCM was tantamount to theft.

“It is a classic example of a hijacking,” he said.

“We woke up one fine day to find ZCCM-IH had applied ex-parte to wind up the company,” he said.

In Vedanta’s view, ZCCM-IH ought to have aired its complaints in terms of KCM’s shareholders’ agreement which allows for grievances and dispute resolution – a view supported by South Africa’s High Court which last year ordered ZCCM-IH to desist its winding-up order.

There have been attempts to resolve the dispute.

In September, President Edgar Lungu, agreed to negotiate with Vedanta following a meeting with the Indian firm’s executive chairman, Anil Agarwal.

However, the negotiations lost almost immediate momentum.

Since then, there have been reports that the Zambian government has been seeking to sell off parts of KCM, a development Vedanta has so far been able to foil.

It said in a recent statement that any third party attempting to buy KCM assets from the Zambian government could be breaking the law.

Undeterred, Mr. Musukwa today also criticised Vedanta’s track-record for poor governance at the Chingola facilities, one of KCM’s assets, that last produced copper in 2014.

KCM owed creditors and its failure to operate the mine was “criminality” as the company was locking up resources that other investors could exploit.

“Zambia is open for business and is ready to welcome well-meaning investors who follow the rule of law,” said Mr. Musukwa.

“Serious investors have no cause to worry.”

His comments were met with applause.

Venkatakrishnan argues that Zambia had made it difficult to operate profitably in the country prior to ZCCM-IH issuing a winding up order.

It had imposed new fiscal changes that helped dry up cash flow whilst a 300% increase in power tariffs further hurt KCM’s ability to fund itself.

“Vedanta has continued to bankroll KCM through all of this: some $500m has been invested in the mine until May last year when we were last in control.

It’s like being evicted from your house; you can’t even go into your house and visit it,” he said.

A crushing blow for KCM has been the government’s refusal to refund VAT that Venkatakrishnan calculated could be north of $160m.

“At some stage, a dialogue will take place,” said Venkatakrishnan.

“We are speculating, but it has to happen. There is a cash crunch coming which makes us hopeful,” he said of Zambia’s increasing inability to fund KCM.

As the local economy continues to slow down, retail chain Spar at Arcades Shopping Mall has announced that it will be closing down.

In a notice to suppliers, Spar Country Manager Ken Darby said the closure is due to the non viability of the business.

Mr Darby revealed that 29th March 2020 is the last day of trading.

He did not disclose the number of jobs to be lost or the impact on jobs following the decision.

“The store will run the February Month-End promotion while reducing stock. We will in April be moving any remaining stock and equipment to our other branches, or storage within Lusaka,” Me Darby wrote.

He said all other corporate stores will remain open.

Minister of Foreign Affairs Hon. Joseph Malanji says the Africa Continental Free Trade (AfCFTA) presents a higher chance of success when Africa resolves peace and security issues affecting certain parts of the continent.

Hon. Malanji welcomed this year’s theme, Silencing the Guns :Creating Conducive Conditions for Africa’s Development and said Africa seeks to achieve durable social and economic development.

Mr. Malanji who is in Addis Ababa to represent President Edgar Lungu at the 33rd African Union Heads of States and Government Summit is accompanied by Minister of Justice, Hon. Given Lubinda and Minister of Commerce and Trade, Hon. Christopher Yaluma

The Heads of states Summit has been preceded by the 36th ordinary session of the executive council that has officially opened today.

The Minister said no meaningful development could be achieved in Africa in the absence of peace and security.

The Minister further said Zambia has put in mechanism such as the amnesty programme for voluntary surrender of fire arms and demining of areas that have landmines that were planted during conflicts in some neighbouring states, in order to contribute to the Agenda of silencing the guns on the continent.

The Minister further said the Continental Free Trade Area will only thrive if Africa tackles the problem of instability that has ravaged some countries.

The Minister further said Zambia supports the AU Agenda of creating a single market as envisaged in the 7th National development plan that promotes an open and liberalized economy.

And First Lady Esther Lungu will be represented at the Organization for First Ladies for Development-OAFLAD- by Ministry of Health Assistant Director – Cancer Prevention Dr. Sharon Kapambwe.

This is according to press statement issued by Mrs. Inutu Mupango Mwanza, First Secretary-Press & Tourism at the Zambia Embassy, Addis Ababa, Ethiopia.