Zambia’s Suspension of 15% Export Duty on Precious Stones: Economic Impact and Expert Reactions

Lusaka, Zambia – The suspension of the 15% export duty on precious stones and metals in Zambia has elicited divergent views and reactions, with economic experts, business leaders, and political commentators analyzing its impact on Zambia’s gemstone industry, foreign investment, and local entrepreneurship.

On February 18, 2025, Finance Minister Dr. Situmbeko Musokotwane issued Statutory Instrument No. 4 of 2025, effectively suspending the export duty. The move was justified as an effort to make Zambia’s gemstone sector more competitive globally while ensuring a stable investment climate. However, this decision has drawn sharp criticism from certain quarters, particularly those advocating for greater local participation in the gemstone trade.

Dr. Lubinda Haabazoka’s Concerns

Among the many voices is former Economic Association of Zambia (EAZ) President, Dr. Lubinda Haabazoka, who in a detailed statement lamented that Zambia remains the world’s largest exporter of emeralds yet continues to reap minimal benefits from the sector due to the overwhelming dominance of foreign firms. He pointed out that, historically, local involvement in the trade has been minimal, with Zambians mostly engaging in the illicit trade of gemstones stolen from established mines and sold at low prices to foreign buyers.

“The gemstone industry is highly capital-intensive, and without generational wealth, Zambians have been largely excluded from meaningful participation,” Haabazoka wrote. “Meanwhile, foreign companies and individuals have amassed billions of dollars from our resources. Ideally, the government, with its financial muscle, should have empowered capable Zambians to enter this industry or mandated ZCCM to take charge on behalf of the nation.”

Haabazoka also alleged that international mining firms have historically used auctions abroad as a loophole to underdeclare sales values and avoid paying corporate income tax. To counter this, the Zambian government previously mandated local auctions, but compliance from mining firms remained low. The introduction of the 15% export duty on gemstones was meant to ensure Zambia benefitted from its resources, but it was met with resistance from the industry.

“These companies then began announcing work stoppages and suspending mining activities, essentially blackmailing the government. Now, it seems their lobbying efforts have paid off,” he argued.

Haabazoka further questioned why the government listens to foreign businesses but disregards the struggles of local entrepreneurs, noting that small businesses continue to face high taxes, rising business operation fees, and limited government support. “Personal income tax remains high, discouraging companies from offering better salaries and reducing disposable income for the ordinary Zambian. We must find a formula to create wealth for ourselves instead of making decisions that only benefit outsiders,” he added.

Dickson Jere’s Take: Government Yielding to Foreign Pressure?

Renowned lawyer and political commentator, Dickson Jere, also weighed in, questioning whether the suspension of the export duty on precious stones was a result of undue foreign pressure. Jere argued that while the government may see the move as a way to sustain the sector, it risks setting a precedent where foreign firms can threaten economic disruptions to push for favorable policies.

“This decision raises serious questions about Zambia’s sovereignty over its own resources. If the justification is that investors were threatening to leave, then what happens next? Will we keep giving in to their demands at every turn?” Jere remarked.

He pointed out that despite Zambia’s rich gemstone reserves, the country continues to struggle with revenue generation and economic development because of lenient policies favoring multinational firms. Jere suggested that the government should have instead engaged stakeholders to find alternative solutions that do not involve waiving critical revenue streams.

Jito Kayumba’s Defense of the Government’s Decision

On the other hand, Special Assistant to the President on Finance and Investments, Jito Kayumba, defended the government’s move, arguing that the tax was having unintended negative consequences, including making Zambian gemstones less competitive and discouraging investment.

“In policy-making, we must consider both revenue collection and the sustainability of an industry. The 15% export duty on gemstones was introduced with good intentions, but it inadvertently stifled investment and pushed traders to find ways around the system. Instead of maximizing tax revenue, it led to decreased exports and reduced government income in the long run,” Kayumba stated.

He also dismissed claims that the government was favoring foreign businesses, explaining that international investors provide much-needed capital and expertise in the Zambian gemstone industry. According to him, without policies that attract and retain investors, Zambia risks losing out on long-term benefits such as job creation, infrastructure development, and skills transfer.

“The government is not here to punish businesses. We want an industry that thrives, creates jobs, and contributes to the economy. This suspension is a necessary step to achieve that,” Kayumba asserted.

Views on Zambia’s Economic Policy

The suspension of the 15% export duty on precious stones has reignited broader discussions about Zambia’s economic policies, especially regarding taxation, foreign investment, and local entrepreneurship. Some analysts warn that Zambia’s over-reliance on foreign mining firms poses long-term economic risks, while others argue that stringent tax policies could drive investors away and stifle growth.

With local business owners feeling the weight of high taxes and stringent regulations, there is growing pressure on the government to implement policies that not only attract investment but also empower Zambians to have a stronger stake in their country’s wealth.

As divergent views continue, one question lingers: Who truly benefits from Zambia’s rich gemstone resources – the country and its citizens or foreign investors? The answer will largely depend on how the government navigates this delicate balancing act in the coming months.

President Hakainde Hichilema has reiterated his administration’s commitment to implementing reforms aimed at driving economic growth and creating jobs, emphasizing the critical role of the private sector in achieving these goals.

Speaking during the third Private Sector Day Re-Run Meeting held in Lusaka today, President Hichilema, whose speech was delivered by Vice President Mutale Nalumango, highlighted the importance of listening to the concerns of the private sector to design effective policies.

“Our administration is dedicated to reducing business costs and improving the ease of doing business in Zambia. This can only be achieved through the full participation of the private sector, women, and the youth in our national development agenda,” the President stated.

The event, organized under the theme “Embracing Sustainability: Unlocking Economic Opportunities in the Face of Climate Change and Drought,” brought together key stakeholders to discuss strategies for fostering a stronger partnership between the public and private sectors.

Key Highlights from the Forum:

Strengthening Public-Private Partnerships:
The Public-Private Dialogue Forum (PPDF), launched on April 27, 2022, serves as a structured platform for inclusive engagement on policy matters. The forum aims to drive innovation, job creation, investment, and economic growth through impactful reforms.

Climate Resilience and Green Growth:
In response to the severe drought experienced during the last rainy season, which adversely affected the energy, water, and agriculture sectors, the government is prioritizing climate resilience. This includes policy reforms and strategic investments in green growth initiatives.

Debt Restructuring Success:
Government efforts to restructure debt have created a fiscal space of $4.7 billion between 2022 and 2024. Without this restructuring, debt servicing would have consumed nearly the entire K217.1 billion budget for 2025.

Rural Electrification and Energy Sustainability:
The government is implementing 62 rural electrification projects, including 19 solar mini-grids, with 3,421 new connections expected by the end of the year. Additionally, a net-metering initiative has been launched to allow homes and businesses to sell excess solar power back to the grid, promoting sustainable energy generation.

Public Sector Recruitments:
Significant progress has been made in recruiting more teachers and health workers, aimed at improving the delivery of education and health services across the country.

Agricultural Development:
The agriculture sector remains a priority, with a focus on increasing the production of maize, wheat, soybeans, and other crops. Special attention is being given to irrigation and improving transport and logistics infrastructure to support regional and international trade.

Call for Private Sector Involvement:
President Hichilema urged stronger private sector participation in energy, agriculture, and infrastructure development. Such partnerships are expected to promote climate resilience, job creation, and inclusive economic growth.

Private Sector Support Crucial for Reforms
Andrew Chipwende, Director General of the Public Private Dialogue Forum, emphasized the importance of supporting the private sector with resources and research capabilities. “It is vital that the private sector presents well-researched proposals to the government that can be easily understood and adopted,” he said.

The forum underscored the government’s commitment to creating an enabling environment for businesses to thrive while addressing pressing challenges such as climate change and economic sustainability.

As Zambia continues on its path to economic recovery, the collaboration between the public and private sectors is expected to play a pivotal role in unlocking the country’s full potential.

Zambia has taken a significant step toward energy sufficiency with the signing of 29 Power Purchase Agreements (PPAs) between Zesco and Independent Power Providers (IPPs) across the country.

The agreements, made possible through the Micro-Generator Scheme and Presidential Solar Initiative, will contribute 332 megawatts (MW) of solar power to the national grid. This marks a major milestone in the country’s efforts to diversify its energy sources, reduce reliance on hydropower, and enhance electricity security.

President Hakainde Hichilema welcomed the development, emphasizing that expanding citizen participation in the energy sector is crucial for economic growth and long-term national prosperity.

“Our government is committed to ensuring that all Zambians have access to reliable electricity,” President Hichilema stated. “By opening up the energy sector, we are not only securing a sustainable energy supply but also fostering economic development and empowerment.”

The initiative aligns with Zambia’s broader strategy to boost renewable energy investment and strengthen the country’s resilience against climate-related challenges affecting hydropower generation.

With this latest move, Zambia is positioning itself as a regional leader in sustainable energy, paving the way for increased private sector involvement and future clean energy projects.

London—Tuesday, 18th February 2025

The second Alliance for Responsible Citizenship (ARC) Conference has drawn global thought leaders to London’s ExCeL Centre, where discussions on Western civilisation, justice, and governance have taken centre stage. Among the most heated exchanges was between former Zambian Ambassador to Ethiopia and the African Union, Emmanuel Mwamba, and UK Conservative Leader Kemi Badenoch over the issue of reparations and immigration.

Speaking at the conference, Badenoch declared that Western civilisation was facing a “crisis of confidence” but insisted that Britain had nothing to apologise for. She dismissed calls for reparations, stating emphatically, “Our country is not racist. We don’t need to apologise. We don’t need to pay reparations or give away the Chagos Islands.”

In response, Ambassador Emmanuel Mwamba strongly disagreed with Badenoch’s stance, arguing that the issue of reparations is not about apology but justice. He pointed out that the African Union (AU) has declared 2025 as the “Year of Justice for Africans and People of African Descent Through Reparations”, underlining the continent’s commitment to addressing the historical injustices of slavery and colonisation.

“The West cannot dismiss the call for reparations as if it were a trivial matter,” Mwamba asserted. “This is about righting historical wrongs that have shaped global inequalities. The African Union has dedicated 2025 to achieving restorative and reparatory justice for the crimes of slavery and colonisation. We will not remain silent.”

Mwamba also questioned Badenoch’s hardline position on immigration, highlighting her own Nigerian heritage. He expressed disappointment that she failed to acknowledge the struggles of immigrants in Western societies.

“I expected Ms. Kemi Badenoch to be sympathetic to immigrants, especially given her own Nigerian background,” Mwamba stated. “Many people from Africa and other regions migrate to the West seeking opportunity, often as a direct consequence of historical injustices. To dismiss their plight so casually is unfortunate.”

The ARC conference, which has attracted over 4,000 delegates, is a platform for shaping a new vision for civilisation. The debates between key figures like Mwamba and Badenoch highlight the ideological divides on issues of history, justice, and governance. As the discussions continue, it remains to be seen whether the calls for reparatory justice will gain momentum on the global stage.

Who is Kemi Badenoch?

Kemi Badenoch is a British politician, engineer, and banker who has rapidly risen to prominence within the Conservative Party. Born Olukemi Olufunto Adegoke in January 1980, she is of Nigerian descent and spent most of her childhood in Lagos, Nigeria before returning to Britain at 16. Her journey from a modest upbringing to leading one of the world’s most influential political parties has been marked by determination, resilience, and a strong belief in conservative values.

Badenoch describes her childhood in Nigeria as “middle-class” compared to her surroundings, though she recalls facing challenges such as no running water or electricity. She often speaks about fetching water in rusty buckets and doing manual labor as part of her schooling, using a machete to cut grass. These experiences shaped her views on self-reliance and governance, reinforcing her belief in meritocracy over victimhood.

At 16, Badenoch returned to Britain and took on part-time work at McDonald’s while studying A-levels in maths, biology, and chemistry. She later earned a degree in Computer Systems Engineering from Sussex University, launching a career in banking and technology before entering politics.

Badenoch’s Rise in Politics

Badenoch’s political journey began in 2005, when she joined the Conservative Party. She has often said that her frustration with “stupid Lefty white kids” at university helped shape her political stance. Her conservative ideology was also influenced by the corruption and inefficiencies she witnessed in Nigeria, which solidified her belief in small government and free markets.

She was elected as a Conservative London Assembly member in 2015 and then as MP for Saffron Walden in 2017. Over the years, she has held various ministerial positions, including roles in equalities, trade, and business. Her influence in government has grown due to her firm stance on cultural and economic issues, making her a prominent voice among conservatives.

First Black Woman to Lead the Conservative Party

According to The Daily Telegraph, Badenoch made history by becoming the first black woman to lead a major political party in the UK. She is also only the second woman to serve as the permanent Leader of the Opposition, following Margaret Thatcher.

Her immigrant background has added an intriguing layer to her political persona. She was born in Britain, but her Nigerian parents took her back to Nigeria, where she was raised. Upon discovering she could claim British citizenship, she compared the moment to finding a Willy Wonka “Golden Ticket”.

Badenoch’s Personal Life

Badenoch is married to investment banker Hamish Badenoch, whom she met through the Conservative Party. The couple married in 2012 and later traveled to Nigeria for a traditional Nigerian wedding ceremony. They have two daughters and a son.

Despite her growing political career, Badenoch has balanced family life and leadership, maintaining a firm and often controversial stance on issues such as immigration, reparations, and race relations. Her recent comments at the Alliance for Responsible Citizenship (ARC) conference, where she dismissed calls for reparations and emphasized the strength of Western civilization, have stirred intense debate among politicians and the public.

Source: The Daily Telegraph