Zambia is endowed with prized natural resources, such as copper, zinc, cobalt, silver, and more. However, it’s quite unfortunate that the country is yet to fully exploit these deposits, according to World Bank’s recent findings.
Although mining accounts for 12 percent of Zambia’s GDP and 70 percent of its total export value, the sector is still not fulfilling its profit potential.
“We need to know where to improve and what changes to make so we can harness this wealth to benefit not only current, but also future generations of Zambians,” Ina Ruthenberg, Zambia’s World Bank Country manager, suggests.
Reasons for Disparity
In a recent review of Zambia’s mining sector, the World Bank concluded that while the country is an attractive place for investment due to its favorable geology, long history of mining, political stability, and progressive economic environment, the lack of financial transparency and accountability continues to hinder growth in the mining industry.
Other major obstacles outlined in the World Bank’s report include the lack of consistency in Zambia’s financial policy, inadequate support for economy diversification, and slow infrastructure development.
Currently, 92 percent of the equipment used in Zambia’s mining industry is imported, largely because the industry hasn’t developed any national supplier policy, thus exposing miners to additional import expenditure.
In the survey, the World Bank points out the need for the Zambian government to fast track the establishment of a local supplier development policy that will cushion stakeholders in the mining sector from additional expenses.
The report further highlights the importance of having openness and transparency in financial management, with most stakeholders calling for the independence of licensing authorities in the mining sector.
“We need to stick to the rules of the game in the long term to foster a stable investment environment, while simultaneously diversifying our economy so we are not overly dependent on mining,” Zambia’s Permanent Secretary for Mining Paul Chanda notes.
The Zambian government also needs to ensure full integration of the mineral sector into national development plans.
Finally, regulatory and monitoring authorities in Zambia must be strengthened to ensure they conduct meaningful consultations among stakeholders in the mining industry.