Zambia should show that it is taking measures to fight corruption to unlock donor aid and investments that have been withheld due to graft concerns, the British High Commissioner to the country said on Tuesday, the International New York Times reported on a Reuters story. Britain, Finland, Ireland and Sweden withheld nearly $34 million in aid to Zambia's social welfare and education sectors in September last year because of concern over financial mismanagement.
Zambia’s central bank kept its key interest rate unchanged to boost economic growth, while warning that it could tighten policy if inflation doesn’t return to target, Bloomberg News reported. The Bank of Zambia held the rate at 10.25%, Governor Denny Kalyalya told reporters Wednesday in the capital, Lusaka. That’s after the Monetary Policy Committee bucked the global trend in May by tightening by 50 basis points as inflation was accelerating.
Zambia’s new finance minister, Bwalya Ng’andu, said he wants to restart discussions with the International Monetary Fund about a bailout loan and that the government may delay the start of a controversial sales tax, Bloomberg News reported. “I will be quite keen to get us talking and see whether we can get the program,” the 64-year-old said Monday in Lusaka after being sworn in to replace Margaret Mwanakatwe, who President Edgar Lungu fired the night before. “At least we can get to some point where we are discussing constructively. There are things on our side that we need to do.
Zambian Finance Minister Margaret Mwanakatwe said on Friday she was delaying the implementation of a new sales tax from July 1 to Sept. 1 to allow it undergo parliamentary procedures, Reuters reported. In March, Zambia previously delayed replacing Value Added Tax (VAT) with the non-refundable sales tax for three months to allow for further consultation with business leaders. Mwanakatwe said the government had continued to receive submissions from both the public and private sectors in the process of explaining the new tax to them.
Vedanta Resources said on Thursday a Zambian court has issued an order halting any move by the provisional liquidator of its Konkola Copper Mines (KCM) business to dispose of KCM’s assets or make arrangements with its creditors, Reuters reported. Zambian state mining company ZCCM-IH holds about 20% of KCM, while Vedanta Resources, part-owner of the Mumbai-listed Vedanta group of companies, holds a majority. Zambia’s dispute with Vedanta began in May when the government of Africa’s second biggest copper producer appointed a liquidator to run KCM, saying it had breached its licence.
Vedanta Resources said it would take urgent steps to protect its Zambian assets and pursue international arbitration if necessary after a Lusaka court on Thursday rejected its request to be included in liquidation proceedings, Reuters reported. A Lusaka judge on Thursday ruled Vedanta Resources could not take part in proceedings to wind up its Konkola Copper Mines (KCM) business in Zambia, but granted Vedanta leave to appeal the ruling. The company said it would consider whether to do so. The case has intensified concerns among international miners about resource nationalism in Africa.
A Lusaka court said on Tuesday a hearing had been provisionally set for June 20 to consider an application by Vedanta Resources to be represented by its own lawyers in proceedings to wind up its Konkola Copper Mines (KCM) business in Zambia, lawyers said, Reuters reported. Vedanta Resources is challenging the appointment of a provisional liquidator without being given the chance to be heard through lawyers of its choice. The company said in a statement on Tuesday the court would confirm on June 17 whether it would go ahead with a hearing on Vedanta’s application on June 20.
A court hearing following Zambia’s decision to name a provisional liquidator to run Vedanta Resources’ Konkola Copper Mines (KCM) business was adjourned for a week on Tuesday without tackling Vedanta’s demands to be involved, the company said, Reuters reported. Vedanta Resources, part-owner of the Mumbai-listed Vedanta group of companies, is KCM’s majority shareholder while Zambian state mining company ZCCM-IH holds a stake of about 20%. In a statement, Vedanta said the judge had considered preliminary issues brought by ZCCM and reserved judgment until June 11.
Global mining conglomerate Vedanta Resources said on Friday it was seeking international arbitration over Zambia’s appointment of a provisional liquidator to run the company’s Konkola Copper Mines (KCM) business, Reuters reported. Vedanta said on Friday its executives were unable to visit its KCM operation and engage with local management, in a setback to efforts to ease tensions amid a legal battle with Africa’s second-biggest copper producer. The Zambian government has accused KCM of breaching its operating license. Legal proceedings have been adjourned until June 4.
Zambia’s bonds have reached another grim milestone. The spread on the copper producer’s $750 million of debt maturing in September 2022 rose above 2,000 basis points this week, Bloomberg News reported. At 22%, the yield was 20 percentage points more than U.S. Treasuries of an equivalent maturity. These are levels almost unheard of in the bond world. Only nations already in default, such as Venezuela, have dollar spreads and yields as high as Zambia’s.