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.