Zambia

Zambia’s bonds have slumped after the country’s government called in advisers to help restructure its debt, as investors worry that the coronavirus crisis could trigger a wave of defaults in emerging markets, the Financial Times reported. The copper exporter was already struggling with a growing debt burden, much of it in the form of loans from China, before the pandemic caused big outflows from emerging-market debt funds and a plunge in metals prices.

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Zambia will cancel or downsize project loans worth about $5 billion as the nation tries to rein in runaway external debt that’s been increasing its risk of default, Bloomberg News reported. The government has about $7 billion in pipeline external debt -- loans contracted but not yet disbursed -- and plans to slash this to about $2 billion, Finance Minister Bwalya Ng’andu said on Wednesday.

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Zambia is already restructuring, renegotiating or refinancing its extensive Chinese project finance debt, and Chinese companies are playing hardball, according to new research, CNBC reported. Southern Africa's third-largest economy is under pressure from an impending breakdown of its power supply and its inability to pay for electricity imports, and is staring down the barrel of further defaults on construction project financing and bond payments.

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Zambia’s Konkola Copper Mines (KCM) smelter could restart next week after a delay of around a fortnight, mines minister Richard Masukwa told Reuters. The smelter was shut down in early October for annual maintenance, two days earlier than planned due to a leak, Reuters reported. It was initially scheduled to reopen on Nov. 15. “This week we are testing and I hope that next week (the smelter) will be up and running,” Masukwa said on the sidelines of the London Mines and Money conference.

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Zambia’s Konkola Copper Mines (kCM) smelter was on Wednesday shut down for annual maintenance two days earlier than planned after a leak, the provisional liquidator Milingo Lungu said, Reuters reported. Lungu said the smelter, which was scheduled to undergo annual maintentance for 35 days starting on Friday, would now remain shut for 37 days until Nov 15 when output would resume. “There was a leak and hot copper touched water creating steam. We have therefore decided to shut down the smelter for annual maintenance two days ahead of schedule,” Lungu said.

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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.

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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.

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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.

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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.

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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.

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