CAPE TOWN, August 28 (ANA) - Zambia’s biggest bank, Stanbic Bank, has challenged stakeholders to use the current downturn in mining caused by the Covid-19 pandemic to envision an economy that is not mineral dependent.
Stanbic Bank, part of the Standard Bank Group, focused on the Copperbelt province in this week’s episode of its popular Anakazi Online Conversations webinar where it applauded the country’s resilience in the face of the economic headwinds from a weakening currency and depressed mining sector amid Covid-19.
The Copperbelt’s pivotal role as a driver of the nation’s economy holds the key to its resilience and recovery, according to the bank.
However, despite the successes achieved across the broader economy, the mining industry remains among one of the worst affected by the pandemic.
When the virus broke out in the country in March this year, the mining sector was already plagued by several issues including low copper prices, with some key players going through liquidation and others placing their investments on care and maintenance.
“Covid-19 only compounded the stresses the mining sector was already struggling through,” ECB Legal Practitioners senior partner Elijah Banda said.
“While this may be true for other industries as well, seeing that the country was going through an economic downturn, the key difference lies in the fact that the mining industry anchors the country’s entire economy. It is responsible for 75% of Zambia’s total export earnings, thus its struggles are more keenly felt.”
Banda noted that the negative impact of the mines’ downturn rode on the sector’s multiplier effect to impact the wider economy.
“Businesses on the Copperbelt have borne the brunt of the extractive sector’s downturn in a kind of reverse multiplier effect,” he said, adding that as the mines struggled, businesses on their supply chain suffered, with many forced to scale back operations or close entirely.
“It really is a vicious cycle,” Banda said.
Earlier this year, the Zambia Chamber of Mines submitted a three-phase economic plan to the government as it scrambled to save the sector.
The proposal outlined immediate relief measures that could be implemented to not only prop up the mines but also suggest a fiscal system that would help rebuild the economy.
- African News Agency (ANA); Editing by Naomi Mackay
