Landmark Industrialization Agenda

By Derrick Silimina

In many Zambian schools, students do not have desks to sit during the lessons. In addition, most of the furniture used in schools is imported. 

For this reason, the “2,000 Desk project” has been launched in the town of Solwezi by the government to equip school kids with capacity and competences through a youth skills empowerment training programme.

The programme supported by the Solwezi Trades Training Institute (SOTTI) and Kansanshi Mines is creative because it will tackle multiple challenges in Zambia. 

Schools will be provided with the much-needed furniture for their pupils while the government will attain its objective for skilling citizens and creating much needed jobs.

Kansanshi Mining, a subsidiary of the global copper company First Quantum Minerals, has offered to supply steel and wood for the project. 

SOTTI on the other hand will train the artisans who will produce the desks for the schools. The institution is already training 80 women in various skills programs under the support of the Africa Development Bank (ADB).

“We should no longer import desks because as a country we have more than sufficient capacity and capability to be able to make our own desks. We are answering that call saying that yes, we can,” said Felix Mutati, the minister of technology and science.

The 2,000 Desk project has so far absorbed 30 students in metal fabrication and 30 students in carpentry and joinery. 

The government sees the initiative as a reflection of its development objectives encompassed in the 2030 agenda and the revised 8th National Development Plan which are in line with SDGs.

Mutati believes the initiative can absorb thousands of unemployed youth who drop out of school due to various challenges. 

He says that SOTTI is providing training for youths with little or no education. Most of them will work as carpenters or metal fabricators in the formal and informal sectors.

North-western province minister Robert Lihefu described the project as a landmark aspiration of Zambia’s new government saying, “I am extremely excited to be part of this launch and I hope to see more youths benefit not only from here in Solwezi but also in other parts of the province because we have adequate land and forests to support the initiative.”

Kansanshi Mine General manager Anthony Mukutuma believes the project represents sustainable community empowerment. “On behalf of Kansanshi as well as my team, we are always very happy to take part in sustainable projects such as this one and we look forward to continued involvement in other programmes in the district,” he said.

“The school’s desk project will definitely enhance our local industrialisation agenda and create the much-needed jobs, reduce poverty, promote self-sustainability among the youth and economically empower them to play a more meaningful role in the development and uplifting of their communities and the nation at large,” Boyd Muleya, a Lusaka based economist says.

Zambia’s Long Walk to Debt Recast

By Derrick Silimina

In his quest to jump-start the ailing economy, tackle external debt, tame inflation, create jobs for young people and inspire the confidence of international investors, President Hakainde Hichilema’s administration recently secured a deal in principle with the International Monetary Fund (IMF) that it hopes will anchor talks with creditors.

While the debt crisis is once again in the spotlight, stakeholders have been playing hide-and-seek over who is responsible for blocking a comprehensible deal to restructure the country’s debt stock. 

Although Zambia seeks to rework as much as $17.3 billion of external debt, it faces a complex test case for international efforts to tackle the looming crisis. 

United Kingdom Minister for Africa Vicky Ford recently said that Zambia’s debt restructuring efforts are being delayed by one international creditor that seems to be taking more time to make a decision.

Arguably, China is the largest creditor in Africa and it is part of the G20 Debt Service Suspension Initiative (DSSI), which is supported by the World Bank and the IMF, and has suspended debt payments to dozens of the world’s poorest countries. 

Zambia’s commercial and state-owned Chinese lenders account for over $5 billion, making the Asian country by far the biggest creditor, according to data from the Ministry of Finance. 

According to financial analysts, Chinese creditors helped finance a spending splurge that led to a socio-economic crisis under Edgar Lungu’s fallen regime.

In this context, Minister of Finance and National Planning Situmbeko Musokotwane has shared his hope for rapid progress on Zambia’s debt restructuring. 

“The New Dawn administration of President Hakainde Hichilema has a duty to the Zambian people to transform the country’s economy, so that it achieves sustainable growth, becomes resilient, more attractive to investors and internationally competitive. This methodical approach will help us lift our people out of poverty through the creation of decent jobs, development of enterprises, and sustained formation of wealth,” Dr Musokotwane said. 

This was during the just-ended World Bank Group and its Bretton Woods Partner, the IMF Spring meetings at the IMF Headquarters in Washington, DC, United States of America. 

COMPLETED 

The IMF has since confirmed having completed a joint debt sustainability analysis for Zambia to assess debt relief and strengthen its return to sustainable debt levels.

 

Speaking during the same event, IMF Managing Director Kristalina Georgieva commended Zambia for making impressive progress in implementing measures under the country’s economic reform programme. 

“We share the hope for rapid progress on Zambia’s debt restructuring so that the IMF Board can soon consider the authorities’ (Zambia) programme. This comes at a crucial time when we are entering a new phase of the debt restructuring process with the critical path to form the Official Creditor Committee,” Georgieva said. 

Following the Zambian Government’s concern at the delays in the formation of the Official Creditor Committee under the G20 common framework for debt restructuring, the IMF further announced that China is now committed to join the creditors’ committee on Zambia’s early debt resolution. 

Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has been seeking to restructure its dollar obligations under the Group of 20’s Common Framework, a set of guidelines that the most powerful countries drafted to mitigate debt crises in poorer countries. 

Speaking during the G20 Finance Ministers meeting, China’s Finance Minister Liu Kun affirmed that China, with the principle of collective action and fair burden sharing, is willing to implement the G20’s Debt Service Suspension Initiative in a methodical fashion on a case by case basis. 

In its latest report, World Bank Group President David Malpass met with Minister for Finance and National Planning Situmbeko Musokotwane of Zambia. 

COMMENDED 

President Malpass has commended Zambia’s progress in implementing fiscal and structural reforms and improving public service delivery in health and education. 

President Malpass also welcomed Minister Musokotwane’s thoughts regarding the impact of the war in Ukraine on Zambia. 

Malpass and Musokotwane further discussed the World Bank Group’s (WBG) support through IDA19 and IDA20, with projects under preparation for FY22 for a total amount of U$560 million. 

Malpass underscored to Dr Musokotwane the need for a deep and rapid debt restructuring for Zambia. 

The World Bank head welcomed China’s announcement to join the creditors committee for Zambia under the G20 Common Framework adding that a potential budget support operation from the World Bank could accompany a debt treatment plan by creditors and an IMF programme once it is approved. 

“Urgent action from the international community is critical at this point to support Zambia’s macroeconomic stability and debt sustainability to spur growth and poverty reduction,” Malpass stated. 

POSITIVE 

Some local financial experts are positive about the outcome of the debt talks at the just-ended Spring summit and they anticipate the strengthening of the economy. 

Zambia Revenue Authority Board chairperson Dr Caleb Fundanga recently acknowledged that the slight appreciation of the Kwacha in recent days can be attributed to China’s commitment to join the Official Creditors Committee for Zambia’s debt restructuring. 

According to ZANACO’s Indicative Forex Rates as at April 26, the Kwacha was buying at K17.03 and selling at K17.36. 

And economist Chibamba Kanyama says most foreign investors believe in President Hakainde Hichilema as evidenced by the number of invitations he receives to officiate at international investment forums. 

“Zambia is on the international radar. Foreign investors are highly confident about the prospects of the Zambian economy,” Kanyama said. 

Certainly, in the spirit of progressive economic fundamentals, China’s recent pronouncement and commitment is an important building block to cement Zambia’s case for debt restructuring. 

“Thank you to China and other creditors for agreeing to join the common framework on debt restructuring... we are on course,” Hichilema stated.

Unlocking the Enterprise Nickel Project…

By Derrick Silimina

President Hakainde Hichilema has called for a mindset change among Zambians who should consider themselves owners of the $250m Enterprise Nickel Project which will create an initial 700 jobs.

Speaking during the ground-breaking ceremony of First Quantum Minerals’ Enterprise Nickel Project in Kalumbila District, President Hichilema said the increased revenue from the project would enhance Government support to education, healthcare, Constituency Development Fund (CDF) and social protection. 

“We thank First Quantum, we thank the community of Kalumbila deeply, especially those that God placed around here and have been looking after this mine for centuries, making it available to be exploited and developed in this manner. I would like us Zambians to change our mindsets that the project like this does not only belong to FQM, it belongs to the people of Kalumbila, it belongs to this province, it also belongs to Zambia and Africa as well as to the rest of the world because from here, there are customers waiting for nickel coming out from these pits and that nickel will create more jobs,” Hichilema said. 

Zambia’s newest mine in North-Western Province would both create jobs and impact the lives of tens of thousands of local people, help to diversify Zambia’s mining activities, and turn the country into Africa’s leading nickel producer.

 

Hichilema disclosed that the Enterprise outfit would create an environment conducive for both local and international investors and create opportunities for local businesses. 

“This project was hanging on together with the Kansanshi expansion for over twelve years. I can reveal that we used to chat with these colleagues when I would sneak out of the country to Johannesburg and will find this gentleman there (pointing at FQM CEO Tristan Pascal) and he would complain. But I said there is not so much I can do to help. I will make noise but if this issue is not resolved after the 12th of August 2021, count it delivered thereafter. Here we are today and we have unlocked this project for the greater good,” Hichilema revealed.

The President emphasised that as the world moved further towards electric vehicles, Zambian nickel would be at the core of this new industry, adding that the investment would fuel the economy of the future. 

ENERGY 

The country was therefore well-placed to play a critical role towards the transitioning of energy from fossil fuels in a bid to reduce carbon emissions damaging the climate. 

“Our vision of Zambia plays a credible part towards the transition of energy from fossil fuels that are damaging our climate to green energy that will reduce carbon emissions. Therefore, transitioning from fossil fuels to drive our cars, to electric vehicles and nickel, is part of the package of minerals (copper, cobalt, nickel, manganese, lithium). We are fortunate as a country to host a fair share of these minerals, but if they stay in the ground and if we don’t unlock projects like this, we won’t be able to play our part in keeping our world cleaner and reducing the environmental damage.” 

The head of state urged the mining giant to create a long-lasting relationship with the community if the investment was to thrive and benefit all stakeholders.

“There is a need to create a Community Development Trust (CDT) to raise income to the community so that we can see benefits flowing from this asset up to even the children that are yet to be born, and that is creating lasting value,” he added. 

Speaking at the same event, Mines and Minerals Development Minister Paul Kabuswe commended FQM for having taken advantage of the economic climate created by the New Dawn Government and investing into the nickel mining project. 

Kabuswe highlighted the nickel project as a testament of the UPND leadership goal to revitalise the mining sector and the economic fortunes of the country. 

“Your Excellency, from the time you took over the reins of power, there is one statement that you have always talked about—‘Minister, we have to unlock the economy, Cabinet we need to unlock the economy.’ “You have unlocked the country through CDF which was a very difficult undertaking in the previous regime. Not only have you unlocked it but increased it by I don’t know how many percent points to K25.7 million per constituency every year. You have also unlocked the jobs sector through the recent employment of more than 30,000 teachers and the yet-to-be-unlocked 11,000 plus jobs in the health sector among others, and that is prudent leadership,” Kabuswe said. 

FOUNDATION 

FQM Chief Executive Officer Tristan Pascal said the mining entity’s contribution to Zambia’s socio-economic development through its Kansanshi mine in Solwezi and FQM Trident in Kalumbila had over the years laid a firm foundation on which to build the Enterprise nickel mine. 

“Our building in-house technical capacities in our people, delivering project executions and providing on-going contributions to the communities and to the nation have provided a firm foundation on which to build the Enterprise Nickel Mine. We are therefore confident that this project will be a success story for Zambia as a whole.” 

In attendance during the historic ground-breaking ceremony were Senior Chiefs Sailunga, Mukumbi and Chiefs Dr Mumena, Ntambo, Chieftainess Chikola and Kakoma from Kalumbila District. Also present were North-Western Province Minister Robert Lihefu, Lands Minister Elijah Muchima and his Labour counterpart Brenda Tambatamba, senior Government officials and mine suppliers among others.