Finweek English Edition - - INSIGHT -

Zam­bia’s new pres­i­dent Edgar Lungu will need to re­store in­vestor con­fi­dence in or­der to pre­serve jobs and grow the econ­omy, which re­lies heav­ily on cop­per ex­ports.

For­mer pres­i­dent Michael Sata, who died in Oc­to­ber, im­ple­mented a se­ries of dis­rup­tive in­ter­ven­tions in the econ­omy, dam­ag­ing in­vestor con­fi­dence, said Gary van Staden, an­a­lyst at NKC In­de­pen­dent Econ­o­mists. This was fol­lowed by an in­crease in Jan­uary of open-pit min­ing roy­al­ties from 6% to 20%, a move for­eign min­ing com­pa­nies warned will cause mas­sive job losses and halt in­vest­ment.

The an­nounce­ment of higher roy­al­ties, which also in­cluded an in­crease from 6% to 8% for un­der­ground min­ers, was made shortly be­fore Sata’s death. While other pres­i­den­tial con­tenders said they would re­view the in­crease, Lungu, the ruler of the Pa­tri­otic Front (PF), made no such prom­ises. A re­view could be pos­si­ble if the in­crease was driven by Sata and didn’t en­joy broad support within the PF, Van Staden said in a re­search note.

Op­po­si­tion can­di­date Hakainde Hichilema, of the United Party for Na­tional De­vel­op­ment (UPND) party, holds his bal­lot be­fore cast­ing his vote on 20 Jan­uary in Lusaka.

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