LUSAKA, May 20 (Reuters) &#8211; Zambia has started to look for a new investor in Vedanta-controlled Konkola Copper Mines (KCM), President Edgar Lungu said on Monday, in a move likely to stoke international miners’ concerns about rising government intervention in the sector.



Zambia, Africa’s second-biggest copper producer, has also proposed tax changes that Lungu insists he will push through, despite opposition from international miners who say they will deter investment that Zambia desperately needs.



“We are not shaken in our resolve to divorce (from some companies), starting with KCM, and we have filed that notification,” Lungu said on Zambia National Broadcasting Corporation radio, adding he would brief the cabinet on the decision later on Monday.



The decision follows a number of breaches of the terms of KCM’s mining licence, presidential spokesman Amos Chanda told Reuters.



“The government is planning to revoke KCM’s mining licence because of the breaches,” Chanda said.



London-listed Vedanta said it was seeking an urgent meeting with Lungu over the future of KCM and that it had not received formal communication from the government on KCM.



It said in a statement it was the intention of KCM and Vedanta, its primary shareholder, to continue to engage with the government “in a constructive and transparent manner”.



The government, which also has a stake in KCM through a state mining company, “(is) fully apprised of and party to the circumstances of the company and major decisions that have been taken,” Vedanta added.



Chanda said a default notice had been issued to KCM in April last year for a number of breaches and that it had not convinced the government that it should keep its licence.



He also said “about three investors” whom he could not name were interested in the asset, but no negotiations had begun.



“Everything will be done within the law and that’s why we cannot name the interested investors until the separation process with KCM is done,” he said. (Reporting by Chris Mfula in Lusaka and Barbara Lewis in Johannesburg; Writing by Alexander Winning; Editing by Louise Heavens and Mark Potter)

Why Zambia is seeking a new investor in Vedanta-controlled copper miner

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Despite commitments by governments on the continent to increase health budget, the sector remains hugely funded by donors. CNBC Africa’s Fiona Muthoni spoke had a conversation with Christopher Kalili, MP from Zambia on how sustainable the sector is.

How sustainable is Africa’s health sector

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Yesterday Air Botswana announced the resumption of flights into Zambia and just this week Air Tanzania will commence flights to Lusaka. Zambian Minister of Tourism and Arts, Charles Banda joins CNBC Africa for more.

Airlines are rushing into Zambia, here’s why

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Investment opportunities in the mining sector in Zambia, Zambia’s dialogue with the IMF about a possible debt bail out, and priorities to ensure the growth of the Zambian economy are among the topics addressed by Zambia&#8217;s Finance Minister Margaret Mwanakatwe in her conversation with CNBC Africa’s Fifi Peters at the 25th Investing in African Mining Indaba in Cape Town.

Margaret Mwanakatwe on investment opportunities in Zambia

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Concerns raised by mining companies about Zambia’s new taxes tax regime are being addressed at the 25th Investing in Africa Mining Indaba underway in Cape Town. CNBC Africa’s Fifi Peters caught up with Zambia’s Mining Minister Richard Musukwa to talk about taxes, mining sector job losses, and Zambia as an investment destination.

Mining minister Richard Musukwa on Zambia’s new tax regime

LUSAKA, Jan 3 (Reuters) &#8211; Mining companies operating in Zambia have failed to show how higher taxes introduced this year will affect their profitability despite objecting to the new framework, a senior government official said on Thursday.



The country, Africa’s second-largest copper producer, increased its sliding scale for royalties of 4 to 6 percent by 1.5 percentage points from Jan. 1 and introduced a new 10 percent tax when the price of copper exceeds $7,500 per tonne.



Zambia also plans to replace value-added tax with a sales tax by April to help bring down mounting public debt.



The Chamber of Mines said last month that as a result of the changes, more than 58 percent of Zambia’s copper producers would be loss-making at current prices.



Paul Chanda, permanent secretary for mines, said his ministry had asked individual mining companies to provide financial models by Friday last week on how the new taxes would impact them, but none had done so.



“We wanted them to show how the new taxes will affect production and profitability but so far we haven’t received anything,” Chanda told Reuters.



“Two mining companies have written to us asking us to give them more time but we haven’t heard anything from the others.”



Mining companies may lay off more than 21,000 workers because of reduced capital expenditure over the next three years resulting from the higher taxes, the Chamber of Mines said last month.



Mining accounts for more than 70 percent of Zambia’s foreign-exchange earnings. Companies operating in the southern African nation include First Quantum, Glencore, Barrick Gold Corp and Vedanta Resources. (Reporting by Chris Mfula; Editing by Dale Hudson)

As mines warn of job losses as higher taxes implemented, Zambia says they’ve failed to show impact, here’s why

LUSAKA (Reuters) &#8211; Canada’s First Quantum Minerals (FQM) said on Friday that it would lay off 2,500 workers in Zambia over plans by Africa’s No.2 copper producer to hike mining taxes.



The southern African country plans to introduce new mining duties, replace value-added tax (VAT) with a sales tax and increase royalties, from January, to help bring down mounting public debt.



The layoffs point to a further escalation of tension between the government and the mining industry in a country where the sector accounts for more than 70 percent of Zambia’s foreign exchange earnings.



FQM said in a statement that it planned 1,250 layoffs at its Sentinel Mine at Kalumbila and 1,250 at the Kansanshi mine in Solwezi in the first quarter of 2019, as well as an unspecified number of contractors.



Zambia’s local mining body said on Thursday that Zambia was pricing itself out of the global mining market with the proposed tax hikes, which are aimed at bringing down mounting public debt.



Concerns about Zambia’s rising debt, alongside accusations of additional hidden borrowing and government corruption, have spooked investors and Western donors in recent months. 



The International Monetary Fund has put on hold talk about an aid package due to Zambia’s debts, which it describes as unsustainable.



Reporting by Chris Mfula; Writing by Alexander Winning; Editing by James Macharia

Here’s why First Quantum Minerals is planning to lay off 2,500 workers in Zambia

By Oluyede Ajayi, Senior Programme Coordinator at the ACP-EU Technical Center for Agriculture (CTA) based in the Netherlands
Walmart. Amazon. Tesla. Many of the world’s biggest businesses started small &#8211; and would not be where they are today without the help of start-up loans.
But in sub-Saharan Africa, the small businesses providing on average <a href="https://www.weforum.org/agenda/2015/09/what-is-africas-agriculture-potential/">24 per cent of GDP</a> across the continent are receiving a meagre one percent of bank lending.
These are Africa’s smallholder farmers, who constitute over half the continent’s population, and are tasked with feeding an ever-expanding and increasingly hungry population.
One reason funds are so hard to come by, is the inherent risk involved in farming that is so subject to erratic weather.
Sufficient investment will never be unlocked while farmers’ future profits remain so uncertain. Yet the African food and beverage market is projected to be worth $1 <a href="http://www.farmingfirst.org/africanag">trillion dollars</a> by 2030, if the right investments are made. We need to find ways to open up African agriculture to this investment, even in the face of a changing climate.
READ: <a href="http://cnbc.africa/news/technology/2018/11/16/autonomous-farming-has-arrived-what-africans-should-know/">Autonomous farming has arrived, what Africans should know</a>
Over 4,000 farmers in Uganda’s mountainous south-western region of Butare are one step closer to achieving this. They have set up <a href="https://www.cta.int/en/article/all-eyes-on-the-sky-sid0b22d7569-15c0-4a7f-b07b-638524d829c1">digital profiles</a>, which map the location, size and productivity and their farms.  Unmanned aerial vehicles have been surveying the skies to collect complementary information. When combined, this data is able to act as collateral for these farmers to receive fertilizer and credit to grow their business. The data gives a credible forecast of what farmers need, and whether they will be able to repay loans.
This approach of digitally profiling farmers is among our best bets to strengthen their operations, and unlock financing.
Centralizing data on farmers’ needs makes it easier to deliver bespoke advice, and services like weather forecasting to help improve resilience to weather shocks. In southern Africa, 74,000 farmers have been digitally profiled in Zambia, Zimbabwe and Malawi to this end.
<a href="https://www.cta.int/en/blog/article/climate-change-in-southern-africa-information-is-power-sid0a9c9e9aa-dc94-4172-9078-9cc0044b2fa6">Phineas Muyabi</a> is living proof that this works. When he retired from the Zambian army in 2001, he invested his lump sum payment in seeds and other agricultural inputs. But drought destroyed his crops and over the next few years his family had to rely on food aid.
Now, he receives weather alerts and farming tips via SMS, as part of a regional project to improve the resilience of cereal and livestock farmers in Southern Africa, led by CTA. A digital platform hosted by the Zambia Open University collates data collected by the Zambia National Agricultural Information Service.
In neighbouring Zimbabwe, this alert system is offered together with a weather insurance product, known as the <a href="https://www.ecofarmer.co.zw/subscription-services/zfu-ecofarmer-combo">EcoFarmer</a> “combo”, which allows farmers to insure their crops against the risk of excessive rainfall and excessive dry days for as little as $1 per month.
These digital innovations will be the key to unlocking the investment that African agriculture needs to reach its potential. What will be the key to ensuring their uptake?
Some technology roll-out programmes rely on the appeal of their products alone. For cash-poor, risk-averse farmers, this is rarely enough to entice them on board. This is why the EcoFarmer combo is a “bundled” solution. It provides access to agronomic advice, seeds, and weather insurance (a relatively new concept for farmers) as well as funeral insurance (a product that is well known to farmers). This offers farmers multiple layers of protection, and creates an entry point for new technological approaches to take hold.
Funding to improve telecommunications infrastructure is also going to be extremely important. Between 1998 and 2008, total private sector investment in telecoms in sub-Saharan Africa reached <a href="http://siteresources.worldbank.org/AFRICAEXT/Resources/258643-1271798012256/ICT-19.pdf">$49 billion</a>, mainly in the mobile market. To ensure this type of investment can continue, African governments need to pave the way for telecoms markets to thrive, by providing the necessary investment-friendly policies, and well-functioning regulatory institutional frameworks to ensure this type of private sector investment can continue into the future.
Encouraging countries with similar climatic conditions to come together and pool resources, will also reduce the risk involved in setting up systems for something as complex and technical as weather-based insurance. The seeds have already been sown for this type of collaboration in southern Africa and will allow significantly more farmers to benefit from the technology.
The United Nations climate change conference in Poland is an important moment to make this case. While actors <a href="https://ccafs.cgiar.org/agriculture-advantage-20-event-series-cop24">debate how to transform our food system</a> under a changing climate, boosting investment in the region that is home to six of the ten countries most vulnerable to climate change must be a priority.
Back in Uganda, a newly trained 25-year-old air-to-ground surveillance expert summed up the potential digital innovations present for African farming as he flew a drone over the Igara tea factory plantation. “With this technology,” he said, “the sky is the limit.”

Op:Ed: These digital innovations will be the key to unlocking the investment that African agriculture needs…

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Zambia has denied reports that China is taking over the country’s public assets due to debt. CNBC Africa’s Daniel Sango spoke to Zambia’s Ambassador to South Africa, High Commissioner, Emmanuel Mwamba to clarify on the debt issue and the ties they have with China.

No, China is not taking over Zambia’s national assets – Emmanuel Mwamba

LUSAKA (Reuters) &#8211; Zambia will abolish Value Added Tax (VAT) and replace it with a non-refundable sales tax in April, Finance Minister Margaret Mwanakatwe said on Monday, a move likely to help the government boost revenue collection and bring down mounting debt.
Mwanakatwe said the Zambia Revenue Authority (ZRA) would finalise audits of all outstanding VAT refund claims and collect any unpaid taxes before making the change.
“Sales tax is coming on April 1. We do not have a manufacturing base. There is no value addition,” Mwanakatwe said at a post-budget meeting with business people.
In her budget speech on Friday, Mwanakatwe said Zambia will introduce new mining duties and increase royalties to help tackle debt.
The International Monetary Fund has put on hold talk about an aid package due to Zambia’s debt levels which it describes as unsustainable.
ZRA said in July it had paid out 4.2 billion kwacha ($338.7 million) in VAT refunds, including 2.5 billion kwacha to the mining companies in Africa’s second-largest copper producer.
Analyst Chibamba Kanyama of the Economics Association of Zambia said the introduction of sales tax would boost revenue collection.
“The major thing is that it will stop the refunds. The government will also collect more revenue because there will be less cheating as tax will be on the final product,” Kanyama said.
Mwanakatwe said the government remained committed to settling the verified VAT refund claims accumulated before changing the law.
Zambia has been withholding some money owed to mining companies in tax refunds because the correct documentation has not been provided.
Mwanakatwe also said a study to determine the cost of providing electricity by state-owned Zesco Ltd, which was due to be completed this year, would finish in April next year.
“We are currently procuring somebody from the UK to come and do the study. We have said it must be done by April,” she said.
($1 = 12.4000 Zambian kwachas)
Reporting by Chris Mfula; Editing by Raissa Kasolowsky

Zambia is planning to introduce sales tax, what you need to know

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Intra-African trade has remained at 16 per cent over the last six years with just a few countries contributing to this percentage. Amr Kamel, Executive Vice President, Business Development and Corporate Banking, at Afreximbank believes that the forum will help steer conversations towards unlocking the bottlenecks that hinder trade in the continent.

Intra-African trade fair set to unlock the continent’s potential

LUSAKA (Reuters) &#8211; Ethiopian Airlines has signed a shareholding agreement with Zambia’s main develoment agency to relaunch the southern African country’s flag carrier at an initial cost of $30 million.
The Ethiopian state-owned carrier has outpaced regional competitors Kenya Airways and South African Airways to become Africa’s largest airline by revenue and profit, and has been buying shares in other African airlines to gain a competitive advantage over rivals such as those in the Gulf.
Under the plan, Zambia Airways, being revived more than two decades after it was shut down, would operate 12 planes by 2028, Ethiopian Airlines said in a joint statement with Zambia’s state-owned Industrial Development Corporation (IDC).
Ethiopian Airlines will own 45 percent of the revamped Zambian airline, and Zambia 55 percent, the statement said.
“The initial investment as we start up the national carrier will be $30 million. Obviously, as we operate the airline, we will facilitate the financing necessary to support its growth,” it said.
Ethiopian Airlines said in January it had signed an agreement with the Zambian government to relaunch Zambia Airways.
Zambia Airways will launch local and regional routes this year while intercontinental routes, including Europe, the Middle East and Asia, will be added in the near future, it said.
State-owned Zambia Airways went into liquidation in 1994. The privately-owned Zambian Airways then emerged as the country’s main carrier with flights to other major hubs in southern Africa, but it suspended operations in 2009.
Ethiopian Airlines operates and manages Malawi Airlines through a deal signed in 2013.
In May, the airline said it was in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures. It also aimed to create a new airline in Mozambique that it will fully own.
Ethiopia said in June it would open Ethiopian Airlines and its state-run telecoms monopoly to private domestic and foreign investment in a major policy shift that will loosen the state’s grip on the economy.
Reporting by Chris Mfula; Editing by James Macharia and Adrian Croft

What you need to know about Ethiopian Airlines and Zambia’s $30 million agreement

<figure><img decoding="async" src="https://images.theconversation.com/files/224034/original/file-20180620-137711-kxzb6.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="File 20180620 137711 kxzb6.jpg?ixlib=rb 1.1" /><figcaption>Rosewood is popular in China for ‘hongmu’ &#8211; antique furniture. 
Shutterstock/HelloRF Zcool</figcaption></figure>
<a href="https://theconversation.com/profiles/paolo-omar-cerutti-496591">Paolo Omar Cerutti</a>, <a href="http://theconversation.com/institutions/centre-for-international-forestry-research-1081">Centre for International Forestry Research</a> and <a href="https://theconversation.com/profiles/davison-gumbo-496595">Davison Gumbo</a>, <a href="http://theconversation.com/institutions/centre-for-international-forestry-research-1081">Centre for International Forestry Research</a>
Rosewood is the generic name for several dark-red hardwood species found in tropical regions across the globe. It fetches very high prices because it’s strong, heavy, has a beautiful red hue and takes polish very well – and because the trees are becoming increasingly scarce. On the Chinese market in 2014, for example, prices were <a href="https://www.ft.com/content/5134ca48-bd41-11e4-b523-00144feab7de">in excess</a> of USD$17,000 per ton. That’s ten times higher than the price of more standard tropical hardwood.
There’s a huge demand in China for rosewood logs to make hongmu – antique furniture. Hongmu was used historically by the imperial elite and is now <a href="https://www.forest-trends.org/publications/chinas-hongmu-consumption-boom/">coveted</a> by China’s rising middle class. Supplies of the wood from markets in Latin America and South-East Asia have dwindled in recent years, so Africa has become a key source. Within Africa, Zambia has become one of China’s main rosewood exporters in the past decade.
But the harvesting of rosewood is often not done sustainably. Several African species have already <a href="https://news.mongabay.com/2016/02/threatened-west-african-rosewood-species-gets-cites-protection/">received protection</a> under the Convention on Trade in Endangered Species.
We <a href="https://www.cifor.org/library/6826/informality-global-capital-rural-development-and-the-environment-mukula-rosewood-trade-between-china-and-zambia/">researched</a> the rosewood trade between China and Zambia in 2016 and 2017. We wanted to study the relationship between global and local sources of capital, rural development and environmental impacts. We also wanted to see whether regulations, adopted to preserve natural resources like rosewood, provide the right set of incentives and disincentives for business to be sustainable.
The most common name used to identify rosewood in Zambia is mukula. But because several different species are categorised as mukula, and because comprehensive inventories are lacking, current rosewood stocks are not known. Legal uncertainties and corruption mean that laws, regulations, or sustainable forest management plans, related to rosewood, are rarely implemented and monitored.
This means that Zambia doesn’t benefit much from rosewood trade. Its forests are being decimated, causing serious environmental degradation. And though rural Zambians and their families do profit, this is short-lived. We also found that because the trade isn’t being effectively monitored or taxed, the government loses about USD$ 3.2 million in potential revenue every year.
<h2>Monitoring challenges</h2>
A couple of big factors have allowed this situation to thrive.
The first is that mukula was only recently added to Zambia’s list of official commercial species. It was previously recorded under the general term “other”, so its trade wasn’t properly recorded or taxed appropriately. In addition, even though there’s an export ban on mukula leaving in log form, it has been allowed to leave the country almost exclusively in log form. Aside from legal considerations, this defies the purpose of the ban, which is to boost local processing and job creation in Zambia.
The second is that the government has been issuing and lifting various regulations in rapid sequence over the years, which have left enforcement agencies on the ground unclear about what rules applied where and when. This has boosted corruption, which means many officials have no incentive to ensure the trade is well regulated. About US$1.7 million is paid in rosewood-linked bribes each year. Most of which are collected along Zambian roads where trucks must make payments to proceed towards the points of export.
The results of these legal uncertainties can be seen in the graph below which shows log exports, as recorded by Zambian authorities through the Food and Agriculture Organisation of the United Nations, and log imports as recorded by Chinese authorities.
<figure class="align-center "><img decoding="async" src="https://images.theconversation.com/files/223788/original/file-20180619-126559-7e76s9.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="" /><figcaption></figcaption></figure>
The discrepancies, in volume and value, between the declarations are huge. For example, in 2016, Zambia declared exports for about 3,000 cubic metres at an approximate value of USD$900,000. China, meanwhile, declared imports of about 61,000 cubic metres for an approximate value of USD$87 million. Because Chinese customs do not recognise mukula as rosewood, we cannot determine the amount, but because Zambia exports only a few species whose volumes haven’t changed much over the years, we are sure that mukula represents the vast majority of those volumes.
It’s clear that a series of measures, in particular log-export and production bans <a href="https://af.reuters.com/article/africaTech/idAFL8N1PJ552">adopted</a> over the years, don’t work. Bans only make sense when coupled with other measures, like effective enforcement or a system of incentives. In fact, bans have contributed to keep the rosewood market underground without really affecting harvest and trade. But solutions are possible.
<h2>Focus areas</h2>
Our research suggests that four points need immediate attention.
<ol>
<li>The strategy of continuously adopting and lifting production and export bans is not working and should be abandoned. If a ban is deemed necessary, a coherent enforcement strategy must be adopted, enforced and monitored. If not, The Zambian Forestry Department should propose a revision of the legal framework and ensure logs for export are appropriately taxed.</li>
<li>The Zambian government must support the Forests Act of 2015. This aims to protect the country’s forests and people’s long-term livelihoods by implementing innovative management and monitoring measures, including community, joint and private forest management approaches.</li>
<li>The governments of Zambia and China need to engage in discussions with their respective CITES management and scientific authorities and list mukula as a species that may be threatened with extinction, should the trade not be closely controlled. This would hopefully limit international demand.</li>
<li>Countries in sub-Saharan Africa should learn from each other’s environmental challenges and work better together. While Zambian forests were emptied of rosewood – and the government was deliberating potential countermeasures – buyers and traders <a href="http://pubs.iied.org/pdfs/13603IIED.pdf">had already</a> moved into Malawi, the Democratic Republic of Congo and Mozambique. While trying to perfect domestic laws, the precious resource will already be gone.</li>
</ol>
By working together, the battle to save these fragile forests could be won.
<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/98092/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />Valued contributions to the research leading to this article were also made by: Xiaoxue Weng, George Schoneveld, Kaala Moombe, Nils Bourland, and Robert Nasi.
<a href="https://theconversation.com/profiles/paolo-omar-cerutti-496591">Paolo Omar Cerutti</a>, Senior Scientist Centre for International Forestry Research, <a href="http://theconversation.com/institutions/centre-for-international-forestry-research-1081">Centre for International Forestry Research</a> and <a href="https://theconversation.com/profiles/davison-gumbo-496595">Davison Gumbo</a>, Scientist with the Center for International Forestry Research, <a href="http://theconversation.com/institutions/centre-for-international-forestry-research-1081">Centre for International Forestry Research</a>
This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/why-zambia-has-not-benefitted-from-its-rosewood-trade-with-china-98092">original article</a>.

Rosewood fetches in excess of USD$17,000 per ton but Zambia is failing to benefit, here’s why

So that is it then. There’ll be a summit on July 7, followed by a few last minute tweaks, then, the South African government will have fulfilled its obligations to the people for the next five years. For the country’s hard pressed mining houses the hard work will have only just begun.
The third version of the Mining Charter – a voluntary agreement between state and industry to promote black ownership – is a well-meaning document that seeks long stability by giving the majority a stake in one of Africa’s most lucrative industries. In a nutshell it promises to increase black ownership from 26% to 30%; give a slice of mining right ownership to communities living with the dust of the mines and the workers who dig them. All has to be complete in five years.
The Mining Charter plans to transform the image of the industry for so long seen as an exploitative colonial operation where poorly paid black workers risk their neck deep underground for the wealth that Johannesburg was built on. It will not only benefit the workers, but also ensure that 50% of all mining boards are black so change has a chance to trickle down from the top.
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In many ways this document is a compromise. It fights shy of the 51% black ownership beloved of many other independent African countries further north. It also concedes to the “once empowered, always empowered” principle that the mining companies have fought for. This means that previous transactions on the way to 26% will be recognised even if the black shareholder sells his stake back into white hands at the end of the lock in period.
Yet mining companies are going to find it very difficult and expensive to comply with all of the above in five years at a time when the mines are struggling against rising costs and falling productivity. The empowerment transactions will carry a heavy cost.
Foreign investors are likely to look at the new mining regulations with caution. Capital is coward and it will always go where there is least risk. Long-term stability and righting the wrongs of the past ring hollow to the investors of New York and Moscow who merely want to do business. They just want to do business as quickly and cheaply as they can. If they can’t navigate the mining codes of South Africa they are likely to look elsewhere. Spending on capital projects in South Africa have been falling for the last five years.
&nbsp;
&#8220;We hope the changes from the summit will not be too massive,&#8221; the new mining minister Gwede Mantashe said on the release of the new regulations in Pretoria.
&#8220;This amended mining charter will bring no new investment, nor jobs, to the industry in South Africa,&#8221; says Peter Major, a mining analyst with Cadiz Corporate Solutions in Cape Town.
&#8220;If this goes ahead South Africa risks becoming like struggling mining nations like the Democratic Republic of Congo, Zambia and Zimbabwe for the next 30 years.&#8221;
Food for thought ahead of the last minute changes on July 7.

Op:Ed: SA’s new Mining Charter too radical or good for investment?

By AfDB Vice President for Energy , Amadou Hott
With the lowest power consumption per capita in the world, sub-Saharan Africa is arguably the darkest section of the global village with investments, social and economic growth and jobs creation hobbled by frequent outages, load shedding and total black outs. Over 645 million Africans lack access to electricity.
Yet the continent is rich in energy resources, with well over 10 terawatts of solar potential, 350 gigawatts of hydroelectric potential, 110 gigawatts of wind potential, and an additional 15 gigawatts of geothermal potential. All of these is outside Africa’s huge reserves of coal and gas, which can provide some of the continent’s cheapest electricity.
Surrounded by energy wealth, most Africans still wonder why their countries are so power poor. From the comfort of their friend’s home in the Kingdom of Lesotho, Augustine and his wife Anna, usually spend their evenings staring at the vast Katse dam, the highest dam in Africa, located on the Malibamatso River. They marvel at the evidence of what Mankind can achieve. Lesotho sells billions of litres of the “White Gold” from this dam to neighboring South Africa; the dam also pumps 72 Megawatts of electricity into the national grid.
Completed in 2009, the Katse dam’s imposing 132 KV transmission towers and lines that connect to the grid disappear into the horizon, beyond the towering Maluti mountains that have stood firm for at least 200 million years. Augustine is however moody, most of the time. Saddened by the fact that many of his compatriots still do not have access to electricity, several of their vital social and commercial needs remain unmet due to lack of electricity.
This scenario is Africa-wide. The lack of access to electricity cuts off the vital wants of society. Clearly, children underperform for lack of electricity as schools and homes lack electricity and lives are at risk at hospitals across the continent, as lifesaving equipment lie comatose, unable to be deployed for the purposes they were purchased and installed for.
For these reasons and more, Anna and Augustine are hoping that Africa’s business and political leaders will put Africa’s industrialization and energy drive at the top of their agenda during the 53rd annual meetings of the African Development Bank in the coastal city of Busan, South Korea in May 2018. Thankfully, this year’s annual meeting’s theme is “Accelerate Africa’s Industrialisation”.
Korea holds interesting memories for Augustine. The happiest moments of his life were in May 2002. That was the month his home was connected to the distribution network with a pre-payment meter and this happened just before the commencement of the 2002 FIFA World Cup jointly hosted by Japan and South Korea. The electricity meters and lines connected to Augustine’s community were courtesy of a US$36 million Utilities Sector Reform Project, financed by the African Development Bank, the World Bank and the European Union.
Augustine worked with the project team as a driver. He witnessed the evolution of the project between 2000 and 2007, driving engineers and project managers around his mountainous country and parts of South Africa. The smiles of tens of thousands of new electricity customers are permanently etched in his memory:  from deep rural cross-border pilot electrification projects in Dili-Dili (where it was cheaper to be connected from South Africa) to the Letseng diamond mine (renowned for its large stones) and an ultra-modern ski resort in Mokhotlong (frequented by rich tourists); and to Semonkong village (which has the highest waterfall in Africa) and is supplied by a 2MW mini-hydro power plant run by the national utility company.
They recall the problems folks in Lesotho faced in 2008, when Eskom (the South African utility, that has over 40, 000 MWs installed capacity) unexpectedly restricted supplies to the Lesotho Electricity Corporation (LEC, a 100 MW customer). This led to load-shedding and increased costs.  However, LEC was able to buy power, from as far away as Mozambique, thanks to a functioning electricity market under the Southern African Power Pool (SAPP). Mozambique also has the Mozal aluminum smelter plant, which commenced operations in 2000 and produces over 500, 000 tonnes per year for export, and recently for the local downstream industry. Mozal is the largest industrial employer in Mozambique.
Similarly, Zambia, Botswana and the Democratic Republic of Congo also have huge copper reserves that can be refined locally and used for electrical cables and equipment to drive the transition to green power in the SAPP and the rest of Africa.
Augustine recently heard on the news that Eskom currently has excess capacity, which it is planning to export to its neighbours.  Eskom is also the sole off-taker for over $19 billion of investments under a 2013-2018 globally acclaimed Renewable Energy Independent Power Producer (REIPP) auction programme. This is driving industrialization and will accelerate South Africa’s transition to green growth.
The African Development Bank, as one of the lead financiers in South Africa, providing over $2 Billion to the power sector, is working with other development partners to replicate this success across Africa. This is underpinned by the Bank’s performance in 2017 –  when it approved 31 energy projects in 23 countries, totaling $1.4 Billion.
In the same fiscal period, the Bank’s private sector investments rose by 40% to $400 million, with 100% renewable generation projects, including base-load hydro and solar generation projects in Morocco and Côte d’Ivoire, and key cross-border transmission interconnectors in the West and Central African Power Pool networks. These networks will facilitate the establishment of regional power markets, reduce carbon footprint and accelerate industrialization through the conversion of the region’s vast natural resources like the conversion of bauxite to aluminum, iron ore to steel and gas to fertilizers, and processing of rice, cocoa, fruits and vegetables.
Female entrepreneurs like Anna abound across Africa. Anna remembers how access to electricity enabled her to quit working long hours at one of the huge Taiwanese-owned textile factories in Maseru. That was when she took the bold step to become an entrepreneur. Things are looking up for Anna and her household. This winter will be nice and warm. Their home overlooking the dam now has a solar water heater and a Solar Home System. The authorities will soon replace their old pre-paid meters with smart meters and they will certainly not miss watching any of their favorite matches at this year’s FIFA World Cup in Russia.
After the World Cup, Augustine will have to go see his old friends in high places. He has also heard the rumours and needs to go confirm things for himself. He’s heard through the local grapevine that further industrialization of his community and country is in the offing. Investors are looking for local partners to co-invest and work on a plethora of projects: a 50 MW wind, 20 MW solar and a 500 &#8211; 1000 MW hydro power projects, in Mafeteng. The projects have been initiated by the Bank’s Sustainable Energy Fund for Africa grant). He needs to know how communities and SMEs like him can align with the unfolding positive realities of modern industrialization.

Africa is rich in energy resources but power poor, how the AfDB is working to change this

LUSAKA, April 10 (Reuters) &#8211; The World Bank said on Tuesday that Zambia’s economy is forecast to grow 4.1 percent in 2018 and 4.5 percent next year, lower than previous projections by the lender, because of the expected impact of poor rains.
Zambia is Africa’s No. 2. copper producer but is also heavily dependent on agriculture, much of it maize grown by small-scale farmers who rely on rainfall as they lack irrigation. “Our initial forecasts assumed that rainfall will be as good as the 2016-17 season. However this was not the case. The southern half of the country received poor rains,” said World Bank Zambia economist Zivanemoyo Chinzara.
“This is going to constrain 2018 and 2019 growth through lower agriculture yields and poor electricity generation. The inflationary impact of food prices could further restrain growth by weakening consumer demand.” In an economic report in December last year, the World Bank forecast that Zambia’s economy would grow 4.3 percent in 2018 and 4.7 percent in 2019.
Hydropower makes up more than 90 percent of Zambia’s energy mix and most of the power generated is used by mining companies. (Reporting by Chris Mfula Editing by Ed Stoddard/James Macharia)

World Bank expects Zambia’s growth to slow

By Chris Mfula
LUSAKA, March 28 (Reuters) &#8211; Zambia’s parliament has delayed a debate due on Wednesday on a motion seeking to impeach President Edgar Lungu over accusations of breaching the constitution, according to a letter from the parliamentary clerk seen by Reuters.
Zambia’s main opposition party, the United Party for National Development (UPND), filed a motion last week. The notice set Wednesday as the date for the lawmakers’ debate and vote on the motion.
The impeachment motion has rekindled tensions in Africa’s second-largest copper producer and threatens to derail Commonwealth-brokered talks between the government and opposition after disputed 2016 elections.
“In view of the gravity of the motion, the same is being studied and we shall revert to you in due course,” said the letter sent on Monday from the Clerk of the National Assembly to Garry Nkombo, UPND parliamentary Chief Whip who filed the motion.
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<div id="dpslot_native_5189316_AFL8N1RA2GI" class="ad-container_20U2_" data-google-query-id="COCukIyJj9oCFUpmGwod7xQOiQ">UPND spokesman Charles Kakoma said the motion would now not be debated until parliament’s next session begins in June. Signed by a third of the 166-member house, the motion needs the backing of two thirds to succeed.</div>
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The opposition argues Lungu violated the constitution in 2016 when it challenged his election victory in court, alleging electoral fraud, a claim the government denied.
The opposition believes that under the constitution, the president should, when faced with a legal challenge of this kind, hand over power to the speaker of the National Assembly until the court makes a decision.
The UPND’s case against Lungu was dismissed on a technicality after its lawyers failed to provide evidence within the required time limit.
Chishimba Kambwili, a lawmaker of Lungu’s ruling Patriotic Front who seconded Nkombo’s motion, was arrested last Thursday by Zambia’s Anti-Corruption Commission on suspicion of fraud.
Kambwili, a former cabinet minister who has repeatedly accused government officials of corruption, fell ill while in police custody and was taken to a private hospital for treatment, police and his lawyers said.
He was subsequently transferred to a government hospital for continued treatment on Tuesday, they said.
On Wednesday, Kambwili appeared in court and denied all the charges. Magistrate Mwaka Mikalile granted Kambwili bail and said his trial will begin on June 4. (Editing by James Macharia and Raissa Kasolowsky)

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