First Quantum Minerals has urged Zambia to ensure competitiveness and stability in the mining sector in order to attract foreign direct investment and regain its slot as Africa’s largest copper producer.

First Quantum Minerals  Head of Government Affairs John Gladston said it is essential to this is a competitive electricity tariff structure that reflects the true cost of power production, including the fully depreciated hydropower facilities that are the backbone of the country’s generation.

Mr Gladston was speaking during the Zambia Mining and Energy Conference in Lusaka.

“We have every intention of making Zambia reclaim its rightful position as Africa’s number one copper producer. And I think that is entirely achievable,” he said.

“Fundamental to long-term private sector investment is knowing what the costs will be for the life of its investment in Zambia, and that a natural equilibrium must be sought to ensure equitable benefits between investors, government and communities,” Mr. Gladston said.

First Quantum says current electricity tariffs do not reflect the underlying production cost, and that reforms are needed to improve the operational efficiency of ZESCO.

The company has invested over $6.4-billion in its Sentinel and Kansanshi Mines and the Kansanshi Smelter and has paid more than $3.5-billion in taxes in the last 11 years.

Zambia is currently the second largest producer after the DRC.

The country produced 755 000 tonnes in 2017, ranking it seventh globally, while the DRC produced 850 000 metric tonnes, and DRC ranked sixth in the world with global leader Chile producing 5.33-million tonnes.

The Enel Group and Zambia’s Industrial Development Corporation (IDC) signed off on a financing agreement for around US$34 million for the construction of the 34MW Ngonye solar plant in Zambia.

The financing includes senior loans of up to US$10 million from the International Financing Corporation (IFC), up to US$12 million from the IFC-Canada Climate Change Program and up to US$11.75 million from the European Investment Bank (EIB).

The Ngonye project, Enel’s first power plant in Zambia, is located in Lusaka South Multi-Facility Economic Zone in the country’s south.

Enel will invest a total of US$40 million in the construction of the site, which is expected to generate around 70 GWh per year once completed.

The PV installation will be owned by a special purpose vehicle that will see Enel hold an 80% stake and the IDC holding a 20% minority stake.

The project has also signed off on a 25-year power purchase agreement with Zambia’s state-owned utility ZESCO.

Antonio Cammisecra, head of Enel Green Power, said: “The signing of this financing agreement marks an important step toward the start of an operational presence of Enel in Zambia, helping us establish a stronger foothold in the country. We will be contributing to Zambia’s sustainable development through our renewable energy, leveraging on the country’s abundance of resources and cooperation with reputed international and local partners within the framework of the Scaling Solar programme.”

“The ongoing initiative to standardize both tendering and financing processes, is creating economies of scale for solar projects across the African continent improving economic viability and resulting in the development of solar power in smaller markets and developing countries,” EIB Vice-President Andrew McDowell said.

“Scaling Solar has set a new standard for the development of solar power in Africa, starting with these two projects in Zambia,” said IFC Chief Executive Philippe Le Houérou.

The Tanzania Zambia Railway Authority has appealed to member states to inject more funds to improve the railway line’s operations and performance.

TAZARA deputy managing director Bentram Kiswaga said in a statement that additional investments will go a long way in ensuring the performance of the railway is improved.

Mr. Kiswaga said the bi-national railway needs to procure 20 reliable locomotives to increase carriage capacity.

Currently, the Chinese-funded and -built railway has only seven reliable locomotives used for passengers and wagons with each one carrying 30,000 tonnes annually.

Citing achievements scored for three years (2014/2015 up to May 2018), Mr. Kiswaga noted that TAZARA freight volumes had increased from 88,000 tonnes to 208,000 tonnes.

Others scores were the improvement of transit time from 20-30 days to 5-7 days consistently and almost zero theft in the last three years.

Mr. Kiswaga said despite the achievements, it was unable to pay salaries as it is not making profits. TAZARA needs to transport 600,000 tonnes annually to be profitable.

The Lusaka City Council (LCC) has given National Housing Authority (NHA) seven days ultimatum to improve sanitary conditions in INDECO House situated along Cairo Road, Lusaka or have the building closed.

The inspection carried out by Council Public Health Inspectors on 20th June, 2018 identified that the building fail short of the public health standards.

The inspection revealed that the building is so dirty or so verminous, dirty toilets, blocked sanitary pipes and insufficient supply of water thereby exposing tenants to risks of contracting diseases.

This scenario has compelled LCC to issue an ultimatum to NHA to make improvements.

The action is in line with the Public Health Act Chapter 295, Section 67(b) and (m) together read with the Public Health Act (Drainage and Latrines) Regulations 58 and 84.

LCC has directed NHA to thoroughly cleanse all toilets of the building and maintain hygiene standards at all times.

NHA must also ensure that all blocked sanitary pipes on all floors of the building are unblocked and repaired.

Other work requirements are that all all toilets must be supplied with sufficient water at all times and provide water storage containers to store water for use in times of erratic supply.

The local authority is appealing to other property owners to make sure that their properties comply with public health standards at all times

In May of 2015, the Jesuit Centre for Theological Reflection (JCTR) warned the government of the Republic of Zambia, through an article, entitled “The Eurobond Reality Check” to consider with utmost urgency the setting up of a Sinking Fund in order to thwart a fiscal crisis on account of accumulated foreign debt. The government was further advised, to among other proposals, enhance domestic resource mobilization by modernizing, by way of informatics, payments of taxes, fees and fines. The JCTR advised governments that if no immediate and short to medium term strategies were implemented Zambia risks facing a chaotic economic and financial situation on account of government’s high appetite to borrow financial resources from international capital markets.

As JCTR we acknowledge government in coming to terms with a situation of their own making, which situation was hitherto being denied by the same government. In fact Just last April, Minister of Finance’s full report on the Status of Zambia’s Economy in the First Quarter indicated that Zambia’s external debt was at US$8.7 billion. However, we are shocked to be further informed in just under 3 months, in a ministerial statement aimed at informing the nation on government’s efforts “Addressing Fiscal and Debt Challenges for Sustained Macroeconomic stability and Growth” by the minister of finance that the total external debt is now at US$9.3 billion. Clearly, there is something amiss with debt contraction, recording, accounting and redemption. Sovereign debt management in Zambia has not been accountable and transparent. The policy discordance we are witnessing with regard to general economic and financial management in Zambia stem from resistance to accountability and transparency with regard to public resource management.

It is quite apparent now, why the IMF objected to Zambia’s bailout application. Our books are not in order and we have no capacity whatsoever to contract any additional debt given our current over-the-head debt levels. The austerity measures announced by the government are confirmation that CSOs, Think Tanks, the IMF, amongst, others were in order to advise government to reduce its high appetite to contract debt. Among the measures announced by government to regain fiscal robustness and sovereignty include postponement of pipeline debt as well as cancellation of some of the current contracted debt. Further, the Ministry of Finance has been instructed to ensure strict adherence to the programmed domestic financing in the 2018 budget. In addition we have been informed that the Industrial Development Corporation (IDC) will alongside the Ministry of Finance implement these measures by reviewing the performance of state owned companies to restructure their overall portfolio. It is quite apparent that these measures have been undertaken to avert a looming fiscal crisis. Government has become alive to the reality that the current path of unthrift spending is leading the nation headlong into a fiscal trough whose consequences are too ghastly to contemplate. Of primary concern is the fact that the ratio of external debt to revenue is projected to breach the sustainable estimated threshold of 20 percent by the time US$750 million Eurobond is due in 2022. The long and short of what JCTR is saying is that as a nation we cannot borrow our way out of our current development disparities. It has been reported that, the recent debt sustainability analysis conducted by the IMF and the World Bank indicate that Zambia is at high risk of external debt distress, emanating from the Eurobonds maturing between 2022 and 2027. With the ever widening ratio between debt to GDP; Debt to revenues ratio; and add to this a current account that has recorded negative growth since 2015, the government has no choice but to institute remedial measures.

Going forward, as JCTR, on account of a tight fiscus that has ensued, we recommend to government, as they go about implementing the austerity measures to ensure that social sector funding and spending is unimpeded. In this regard funding to health, education, water and sanitation is maintained at a steady flow. We further advise government that the announced blanket policy of funding to projects that are at 80% completion point be reviewed. Instead we advocate for a project re-evaluation after which viable projects might be identified and funding sustained or capped depending on the outcomes of the re-evaluation. JCTR further demands that the Loan and Guarantees Act be amended with mediate effect to bring it in line with the new amended Constitution which demands that all loan contraction be approved by Parliament. The English adage does say that a stitch in time saves nine. In this regard the government must avoid, the “too little, too late syndrome”. The public debt situation we are in, clearly attests that in the conduct of public affairs, “to be forewarned is to be forearmed.” The looming fiscal crisis, on account of accumulated public debt, attend interest payments and the impending maturation of the Eurobonds, is principally on account of ineptitude and a laissez-faire approach to fiduciary matters.