President of Zambia Hakainde Hichilema has stated his government is planning to implement policies to lower the fiscal deficit, boost economic growth and review mining policies.

 

During his first address to a new parliament session since his election last month, Hichilema said agricultural policies would also be assessed, along with electricity costs.

 

In November 2020, Zambia became the first country in Africa to default on its sovereign debt following the coronavirus crisis, failing to keep up with payments on close to $13 billion of international debt.

 

“Rebuilding our economy is top on our agenda. We will implement policies to address the fiscal deficit while ensuring that confidence is restored in the markets,” the president said.

 

“We have indeed inherited an economy that is in dire straits and requires bold and decisive action to be taken,” he said, going on to add that the government was determined to stop the accumulation of public debt.

 

Zambia’s external debt includes around $3 billion in Eurobonds, $3.5 billion in bilateral debt, $2.1 billion owed to multilateral agencies and $2.9 billion in commercial bank debt.

In addition, mining companies are owed over $1.5 billion in VAT refunds, which has caused tension between the mining sector and the government.

Indeed, Zambia’s Chamber of Mines CEO Godwin Beene said the VAT refunds are the main priority for the industry.

 

Hichilema’s market-friendly stance will attract new investment into the country’s mining sector and help bolster the Zambia’s copper production, Beene said.

“This election was a game-changer for the industry,” he told Reuters news agency.

Zambia is hoping to boost annual copper output to 2 million tonnes by 2026, according to new finance minister Situmbeko Musokotwane last month. The country produced 882,000 tonnes in 2020.