After years of fiscal mismanagement and defaulting on international debt loans, Zambia is looking at turning its finances and fortunes around following the inauguration of a new president on August 24.
One of the first major steps by Hakainde Hichilema, who holds an economics degree from the UK, was the appointment of fellow economist Situmbeka Musokotwane as the new cabinet’s minister of finance.
Sworn in on Friday, Musokotwane, in much the same vein as Hichilema, got right down to business by announcing that ramped-up copper production would be a primary objective of the new government as it strives to more than double production of the raw metal by 2026.
If successful, it will see Zambia’s copper output increase to two million metric tonnes in five years’ time.
Copper accounts for roughly 70% of Zambia’s revenue from export earnings - but under former president Edgar Lungu, a wedge was driven between the previous government’s relations with the mining industry, causing exports to dwindle while government debt ballooned because of unchecked infrastructural expansion projects.
The immediate changes rung in by Hichilema had an immediate effect on how the international business community sees Zambia, resulting in the kwacha and government bonds surging to record highs.
Speaking after he took the oath on Friday, Musokotwane made it clear that the best way to dig Zambia out of its debt hole was to fill it with copper.
Only through increased foreign reserve earnings on the back of sustained extraction and renewed rapprochement with the country’s mining industry, could Zambia turn its failing economy around, Musokotwane said.
It remains to be seen how, if Zambia’s copper production indeed takes off once more, Lusaka intends to ship it out of the Copperbelt Province immediately south of its border with the Democratic Republic of the Congo.
(*) Don’t miss our Zambia feature, out now, which takes an in-depth look at what’s making the country tick after August’s landslide election results.
