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Zambia to establish unit for mineral trading, investing

Published

2 weeks ago

June 12, 2024

To increase its revenue from its natural resources, Zambia will establish a new company for investment and mineral trading, the cabinet announced on Wednesday following approval.

According to the statement, the government of Zambia, the second-largest copper producer in Africa, would create a Special Purpose Vehicle (SPV) for trading and investment purposes. Through ZCCM Investment Holdings, the government currently owns many mining assets.

The new entity would help Zambia “move away from the dividend payment model for mineral resources and adopt a production-based sharing mechanism to ensure benefits accrue to the people of Zambia beyond Statutory obligations,” the Cabinet said.

It further stated that the new business model will guarantee accurate disclosure of mineral consignments intended for export and internal consumption, permit the government to negotiate mineral prices, and share produced minerals.

10% to 20% of mines, including those controlled by Barrick Gold, Vedanta Resources, and First Quantum Minerals, are owned by ZCCM. It recently retained the remaining 51% of Mopani Copper Mines after selling the remaining portion to a division of United Arab Emirates International Holding Company.

Paul Kabuswe, Zambia’s minister of mines, told Reuters in February that Zambia intended to negotiate bigger stakes in new mining operations to increase revenue and encourage investment in social programs.

The nation aims to produce 3 million metric tons of copper annually within the next ten years as the demand for metal rises in the building and electricity sectors. In 2023, the nation produced 698,000 metric tons of copper, down from 763,000 metric tons the year before.

The production of copper decreased from 763,000 tons the year before to 698,000 tons the following year, according to the Zambia Chamber of Mines.

Related Topics:copper Featured Mineral resources Zambia

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IMF grants nearly $900 million to boost Tanzania’s budget

Published

2 days ago

June 22, 2024

Ifeoluwa Dada

In addition to concluding an additional inquiry permitting the transfer of $149.4 million for budget support, the International Monetary Fund (IMF) said on Saturday that its executive board had approved funding for Tanzania totalling $786.2 million to address climate change.

The IMF stated in a statement that Tanzanian authorities are dedicated to carrying out reforms to maintain macro-financial stability, bolster economic recovery, and foster sustainable and inclusive growth.

The administration of President Samia Suluhu Hassan has implemented several economic reforms over the past three years to bring the nation’s real gross domestic product growth rate back to the 6% to 7% range seen before the pandemic.

The multilateral body noted that Tanzania’s economic reform program was still robust and that the country’s economy expanded again in 2023 after contracting in 2022.

“The current account deficit is narrowing, reflecting fiscal consolidation, easing commodity prices, and tight external financing conditions,” the IMF said.

Although the economy is predicted to continue to recover, the IMF stated that there were obstacles due to an “unfavourable global economic environment.”

According to the World Bank, Tanzania’s economy—which is based on tourism, mining, agriculture, and manufacturing—has persevered in the face of repeated catastrophic weather events and climate change because of a growth in the services sector.

As of last week, Kitila Mkumbo, the minister of state in the president’s Office for Planning and Investment, predicted that the economy will accelerate to 5.4% this calendar year from 5.1% in 2023.

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Sources reveal Ghana, bondholders reach agreement for $13bn debt restructuring

Published

2 days ago

June 22, 2024

Ifeoluwa Dada

Following a deal struck with official creditors earlier this month, Ghana has secured an agreement in principle with its bondholders for the restructuring of $13 billion in foreign debt, according to three sources quoted by Reuters.

According to two of the sources, bondholders will get a haircut on the principal of up to 37% as part of the transaction, and the bonds’ term will be extended. Under the weight of the COVID-19 pandemic, the conflict in Ukraine, rising global interest rates, and soaring debt, the West African country that produced gold and cocoa went into default on the majority of its $30 billion in foreign debt in 2022.

Ghana, like Zambia, enrolled in the G20 Common Framework’s debt treatment program. This program’s objectives are to speed up debt restructurings and include China, the newest significant bilateral lender, in the process. After Zambia, the first African nation to default during the pandemic became the first copper producer in southern Africa, its bondholders approved the restructuring earlier this month.

“Things are pretty close” for Ghana. A source who wished to remain anonymous stated, “We can anticipate an announcement by next week, as they were not authorized to speak to the media.”

According to the other two sources, the news might be released as early as this Friday. Due to the late hour, it was not possible to quickly reach the Paris Club, an alliance of creditor nations, or Ghana’s finance ministry for comment.

In mid-March, Ghana initiated formal negotiations with two groups of bondholders: one comprising regional African banks and another of Western asset managers and hedge funds.

However, the proposed agreement did not satisfy the requirements of the International Monetary Fund’s (IMF) debt sustainability analysis, causing the negotiations to break down in April and forcing both parties to reorganize to come up with a workable solution.

According to the three individuals, the agreement in principle was reached because it later aligned with an updated IMF debt framework on Ghana that was previously disclosed to bondholders.

The second-largest cocoa producer in the world signed an agreement with its official creditor committee earlier this month to formalize a debt restructuring agreement that was negotiated in January.

The agreement’s broad contours made it possible for the IMF executive board to convene on June 28 in Ghana to discuss a second assessment of the country’s $3 billion loan, a three-year package, and the release of the subsequent $360 million tranche.