The Auditor General’s report for the financial year ended December 31, 2022, has recorded improvements in the public financial management, with 14 ministries and provinces recording zero audit queries.

Speaking during the presentation of the report at Mulungushi International Conference Centre, Secretary to the Cabinet Patrick Kangwa stated that the report shows a positive trajectory in the financial management, under President Hakainde Hichilema’s administration.

Highlighting some of the achievements attained, Mr. Kangwa disclosed that the number of ministries and provinces not cited in the auditor general’s report has doubled from seven in the year ended 31^st December 2021 to 14 in the year under discussion.

The Secretary to the Cabinet added that even those cited in the report had fewer audit queries than in the previous years.

He revealed that misappropriation of funds was pegged at five billion kwacha last year, but reduced to K135 thousand, representing 97 percent reduction, while unaccounted for funds dropped from K83 million to K388 thousand, almost a 100 percent drop.

He commended the controlling officers for taking the lead to achieve zero audit queries as evident in the audit outcomes.

“I would like to thank the President for the continuous push on us as a team to ensure that we bring audit queries down and improve in the manner in which we account for government resources,” Mr. Kangwa stated.

He noted that with the introduction of the new disciplinary code, more action has been undertaken, resulting in the reported improvement.

And Acting Secretary to the Treasury Danies Chisenda reminded the controlling officers of their responsibilities to preside over the management of public resources and can only earn trust from citizens if zero audits are achieved.

Mr. Chisenda said it was imperative that areas of weaknesses are strengthened and corrective measures put in place so that queries are not repetitive.

He assured the Treasury’s support by improving systems and offering training to accounting, auditing and other staff in various institutions to achieve efficiency, timeliness and accuracy in their operations.

Meanwhile, Director in Charge of Planning in the Office of the Auditor General Bornwell Mpofu appreciated the compliance levels among current controlling officers who provided evidence on time.

Mr. Mpofu made an appeal for the audit process to be followed so that the office carries out its evaluations on time.

Among those not cited included Ministries of Green Economy and Environment, Technology and Science, Commerce, Trade and Industry, Energy, Information and Media, Justice, Tourism, Labour and Social Security, Small and Medium Enterprise Development, Infrastructure and Urban Development, Central Province, Lusaka Province, North-Western Province,  Cabinet Office, and Department of Gender.

A 28-year-old pastor of Chipata district has been convicted and sentenced by the Lundazi Magistrate Court to six months imprisonment with hard labour for possession of fake bank notes.

Appearing before Lundazi Resident Magistrate, Joseph Kapila was Bright Zulu, a pastor of Walela Compound in Chipata district.

Facts of the offence are that on September 22, this year, Bright Zulu had in his possession 8 by 100 United States Dollars forged Bank notes without lawful authority, contrary to Section 358 of the Penal Code Chapter 87 of the laws of Zambia.

The convict pleaded guilty to committing the offence and asked the court for leniency as he was the first offender.

Zulu in his mitigation told the court that he was married with three children, and if sent to jail, his family would suffer.

In passing judgement, Magistrate Kapila expressed sadness that the convict involved was a clergyman, and told him that the court had taken note of his mitigation considering the fact that he did not waste the court’s time.

He said to deter who would-be offenders and help the convict to reform, he will be sentenced to six months imprisonment with hard labour with effect on September 22, 2023.

The International Monetary Fund sees a deal between Zambia and its creditors as “imminent” and is hopeful it will come this week during the crisis lender’s gathering of policymakers, a top official for the institution said.

“I’m very optimistic,” Abebe Aemro Selassie, director of the fund’s Africa department, said in an interview on Monday in Marrakech, Morocco, on the sidelines of the IMF and World Bank annual meetings.

“The ball is in the authorities’ court. It’s between the authorities and their creditors. They’ve told us that they’ve made very, very good progress.”

The deal would come in the form of signing a memorandum of understanding to restructure $6.3 billion of debt.

The government has made slow progress in talks since June, when it reached a deal-in-principle with the committee co-led by China and France.

The agreement would see the interest rates cut to as low as 1% and the loans only repaid in 2043, with a 40% reduction in net-present value of the debt, Bloomberg News reported last week.

Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has struggled to reach a deal with creditors.

Earlier this year, the IMF withheld a near-$190 million disbursement because of delays in the group agreeing to debt relief.

China is by far Zambia’s biggest bilateral creditor.

Zambia’s international bondholders formally started debt talks with the government this week, according to three sources, a key step to restructure more than $3 billion of overseas bonds.

A group of the country’s biggest private creditors has entered into a restricted period, which means they temporarily cannot trade the country’s notes in exchange for non-public information, the sources added, asking not to be named because the discussions were private.

The non-disclosure agreements(NDA) would be still in place next week, one of the sources added, when Zambia officials and creditors are set to meet in person during the World Bank and International Monetary Fund annual meetings in Marrakech.

The Zambia Finance Ministry declined to comment.

Zambia is also expected to sign a memorandum of understanding (MOU) with bilateral creditors such as China and the Paris Club to rework about $6.3 billion of debt.

The country is still in default after becoming the first African nation to suspend debt payments during the 2020 COVID-19 crisis.
Zambia has three outstanding dollar bonds maturing in 2022 , 2024 and 2027 , trading at 51-56 cents on the dollar.

Amia Capital, Amundi, BlueBay Asset Management, Farallon Capital Management and Greylock Capital are on the steering committee of the creditor group that holds around 45% of Zambia’s total outstanding international bonds.

The sources declined to comment how long the restriction period would last.

Creditors were discussing mechanisms that would revamp payments through higher coupons, shorter debt maturities or a combination of both, one of the sources said.

At the end of 2022, Zambia’s debt to international bondholders was $3.5 billion, including $520 million interest in arrears.

The deal with official creditors already includes a mechanism to accelerate loan repayments and raise interest if Zambia’s capacity changes from the current “weak” to “medium” following a joint International Monetary Fund (IMF) and World Bank assessment in 2026.

The IMF said in July that the country is expected to reach a debt restructuring deal with its international bondholders by the time the Washington-based lender undergoes a second review of its rescue loan programme with the country later this year.

Barrick is investing almost US$2 billion in an expansion project designed to increase the Lumwana mine’s annual production to an estimated 240 000 t of copper, from a 50 million tpy process plant over a 36-year life of mine, elevating this once-unprofitable operation into the front rank of copper producers.

The project’s accelerated work program is targeting completion of the full feasibility study by the end of 2024, bringing expected expanded process plant production forward to 2028.

Barrick’s transformation of the Lumwana mine into a world-class producer will provide strong impetus for the government’s thrust to revive the country’s copper industry, President and Chief Executive Mark Bristow said after a recent meeting with Zambian President Hakainde Hichilema.

Since Barrick took over operations at Lumwana in 2019, the mine has contributed almost US$3 billion to the Zambian economy in the form of taxes, royalties, salaries, and the procurement of goods and services.

In addition to its local procurement policy, the company is also committed to local employment, and 99.3% of Lumwana’s current workforce are Zambian nationals.

“Barrick believes that its host countries are its key stakeholders and that partnering with them creates sustainable value for both of us. In Zambia as elsewhere in our global network, we seek to share the economic benefits generated by our mines with the countries’ governments and people, notably our neighbouring communities,” Bristow said.

Last year Barrick launched a Business Accelerator Programme aimed at building business capacity for the Zambian contractors in Lumwana’s supply chain and to support them in effecting their own growth plans.

It is also partnering with the country’s Ministry of Small and Medium Enterprises to support the development of these businesses.

Looking at Lumwana’s current performance, Bristow said it was on track to deliver its production guidance for 2023 and was ramping up owner mining with both the reopening of the Malundwe pit as well as delivery of the new owner mining pre-stripping fleet.

President Hakainde Hichilema stated he was elated by the news of the planned expansion: “This is a show of confidence in our New Dawn government by one of the world’s leading mining companies. Our laser focus is on establishing Zambia as a global mining destination. We have also set ourselves the target of producing 3 million t of copper by 2030. Barrick is a key strategic partner on this journey.”

President Hichilema called on Barrick to prioritise local content and increase the participation of Zambian suppliers to the Lumwana mine.

He also encouraged Barrick to deploy the most advanced mining technology and invest in downstream value addition in support of the New Dawn’s vision of establishing green industrial parks in Zambia.

Sibanye Stillwater which is among investors bidding to buy Mopani Copper Mines, said the amount of money required to expand output and run the Zambian assets profitably is not “onerous.”

The Johannesburg-based precious metals producer is on the shortlist of potential buyers for the copper mines owned by a unit of the Zambian government.

A new owner for Mopani is expected to invest in raising copper output to about 200,000 tons per year by 2027.

Sibanye’s own studies at Mopani as part of the due diligence process indicate that about $1 billion investment is required over four to five years, Neal Froneman, the CEO for the South African platinum mining giant, told Reuters.

“It sounds like a big number but over five years that’s probably $200 million per year. Its not onerous, its an investment into the asset and that’s for the benefit of everybody,” Froneman said in an interview.

Zambia’s state-owned firm ZCCM took control of Mopani from Glencore in 2021 after agreeing to pay the Swiss commodities giant $1.5 billion in a deal funded by debt.

Since then, ZCCM has been searching for a new investor to take over the Mopani assets.

The government had initially said a process to sell the mines being managed by Rothschild & Co would be concluded by July.

The process is “still ongoing” and Sibanye is engaging the government through the ZCCM, Froneman said.

RMB Morgan Stanley analysts have said that Sibanye’s rapid expansion in battery metals, including assets in Europe and the U.S. as well as the bid for Mopani, could pressure its finances and threaten future dividend payouts.

It is also seeking to turn around its palladium mines in the U.S. that were hit by flooding last year.

“Combining the battery metal portfolio build-out with development of two deep-level mines in South Africa and the ongoing Stillwater turnaround effort, Sibanye’s plate currently appears crammed full,” the analysts said.

Froneman said the company would not take risks.

“This perception that’s created that M&A is high risk, but we have always said if there is no cash, there is no way of funding and we don’t do it,” he said.

In August 2023, conservationists in Zambia heaved a sigh of relief when the Zambia Environmental Management Agency (ZEMA) cancelled a decision to allow for mining in Zambia’s Lower Zambezi National Park (LZNP) by Mwembeshi Resources Limited, bringing a 12-year environmental standoff to a halt.

Established as a National Park in 1983, LZNP covers an area of 4,092 square kilometers along the northwestern bank of the Zambezi River.

Prior to its establishment as a national park, the area was the private game reserve of Zambia’s president, which protected it from mass tourism and left it relatively untouched.

A pristine wildlife sanctuary and famous tourist attraction, LZNP is home to 124 species of animals including large herds of elephants, buffaloes, 403 species of birds and 54 species of aquatic animals. Further Lower Zambezi is a vital part of the wider Zambezi basin, a significant shared resource that contributes to the economic, environmental, and social development of Southern Africa.

In 2011, Mwembeshi Resources Limited (majorly owned by a Chinese conglomerate) applied for mining rights in the park in and submitted an Environmental Impact Statement (EIS) which ZEMA rejected.

Mwembeshi Resources Limited appealed this decision, and in 2014, the Minister responsible for environment overturned ZEMA’s decision and approved the mining application, which was met with opposition from various stakeholders including environmental groups.

For years, environmental groups have been battling against the proposed Kangaluwi Copper mine. In 2021, following the close of litigation processes, ZEMA approved the mining company’s resubmitted EIS, that it had rejected in 2012 – also noting that the EIS expired in 2021 (Under the laws of Zambia, if a project doesn’t commence within five years of EIS being approved, the EIS must be redone). A coalition of environmental activists, the Conservation Advocates Zambia (CAZ), approached the courts to reverse ZEMA’s approval but Zambia’s Court of Appeal dismissed the case in February 2021 based on legal technicalities. CAZ also asked ZEMA to review its decision, with no response forcing it to go to the High Court asking for a judicial review of the case to no avail, before ZEMA notified the parties that it had no authority to review its own decisions.

On 27 April 2023, CAZ appealed to the Minister of Green Economy and Environment to halt all activities related to the mining operation with no response. In May 2023, bulldozers began excavation activities in the park.

Timely Decision

ZEMA’s decision is timely meaning that the mining activities by Mwembeshi cannot proceed. Many organizations including civil society organizations and the Lower Zambezi Tourism Association (LZTA) have warned that the mine would have negative impacts on the entire ecosystem including excavation of huge holes in the ground, use of heavy equipment, generation of waste from mining operations including dangerous chemicals, and pollution affecting local communities and wildlife alike.

“We applaud the government for its courageous decision to rectify the errors of prior administrations. The proposed lower Zambezi mine would not only have wrought havoc on the local communities and ecosystems relying on the area but would have also established a distressing precedent for other regions facing comparable perils. It is widely acknowledged that the lower Zambezi region is one of Zambia’s most unspoiled and untainted landscapes, and its ruin for a mine with a limited existence of five years would have set the nation down a path of self-inflicted ruin. Our hope moving forward is for the government to strengthen legislation to ensure Protected Areas stay protected, and that mining is only undertaken in well-designated places”, said Daniel Phiri, National Coordinator, BirdWatch Zambia.

“The growing threats facing Key Biodiversity Areas in Africa is worrying particularly as the continent and indeed the world grapples with the twin threats of biodiversity loss and climate change. The decision to halt mining activities in the ecologically sensitive Lower Zambezi National Park is timely and should be a precedent for other countries facing similar scenarios on the continent”, said Dr Kariuki Ndang’ang’a , Regional Director for Africa, BirdLife International.